- THE MAGAZINE
"If consumer spending is the lifeblood of the American economy, the housing market is its pulse. Nothing could have a more profound beneficial effect on the overall U.S. economy as the passage of the measures outlined in Fix Housing First," said CRI president Werner Braun.
Membership in Fix Housing First comprises more than 600 organizations, including home building companies, manufacturers, and trade associations. The effort, which continues to add new members on a daily basis, is pressing for a major stimulus package to stem the decline in home values, stabilize financial markets, and reignite consumer demand. To get the economy moving again, the coalition is urging Congress to support enhancements to the home buyer tax credit and provide below-market 30-year fixed-rate mortgages for home purchases.
Supporters of Fix Housing First point to the success of a similar plan launched in 1975, when the nation was also in the midst of a recession. At that time, Congress passed a short-term $2,000 tax credit for all new homes ($12,000 adjusted for today's median home prices) along with subsidized mortgage rates. The stimulus jump started the depressed economy and the effects continued long after the measure expired.
The coalition is calling for significant enhancements to the current $7,500 tax credit for first-time home buyers. Among the improvements:
- All primary home purchases between April 9, 2008 and Dec. 31, 2009 would be eligible.
- The credit amount would increase to 10 percent of the home price, and be capped at 3.5 percent of FHA loan limits, bringing the credit to a range of roughly $10,000 to $22,000.
- The current recapture provision would be eliminated. Repayment would only be required if the home were sold within three years. Credit would be available at the time of closing, making it easier to be used as a down payment.
The second component of the stimulus plan would provide qualified home buyers with 30-year fixed-rate mortgages at 2.99 percent on contracts closed until June 30, 2009 and 3.99 percent on closings between June 30 and Dec. 31, 2009. The coalition has also announced its support for continuing foreclosure prevention measures to keep people in their homes.
For more information about Fix Housing First, including a listing of supporters, go to fixhousingfirst.com.