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The $15,000 tax credit for homebuyers that we were getting so many excited emails about has been dropped from the stimulus bill. Sorry, America. [Consumer Reports]
Oh, for the fuck of shit, people!
@shorty63136: Wow, that’s going to be my new catch phrase!
@shorty63136: +1 heart for you.
@shorty63136: what about my proposal to forgive all student loans, eh? eh??
@shorty63136: that was my response when I read this as well. I was hoping to use that! My rush to buckle down and get a home within a year has dropped significantly if this happens. I guess I will just wait for prices to fall an additional 15,000 instead.
“I will just wait for prices to fall an additional 15,000 instead. “
With all due respect,that’s the best thing that you can do anyway. Handing out $15,000 in monopoly money will just raise the price by that amount anyway.The problem now is that many houses are still not priced rationally (especially in runaway states like California) and need to fall some more. Hurts,yes, but this was just another (small) hit of the financial cocaine that landed us in the current mess we are in. Far better ,IMHO, to see houses become more in line with the means to purchase them than this kind of artificial propping up of demand.
@shorty63136: Ah, I knew it was a good idea to heart you.
Money is overrated, just give it to some politician or CEO
Like you expected them to include stuff for the little guy? Yeah, right.
@Plates: Yeah, right. With no income ceiling, it was hardly “just for the little guy”.
@Trai_Dep: Exactly. Since it removed the limit to first-time buyers (you know, the only ones able to stimulate the market) and was limited to tax liability, it was definitely not just for the little guy.
In fact, to actually get $15k out of it one would need to make about $100,000/yr.
Propping up the housing market seems flawed to me for some reason.
@Yossarian:Agreed, it would only stave off the real collapse a little bit but it would eventually come anyways.
@Yossarian: Just like bailing out banks who make poor decisions with money?
@cabjf: Also seems flawed.
@Yossarian: Exactly, but if they did nothing and let the market recover on its own without spending money we don’t have, well, anyone remember Herbert Hoover?
I thought it had been reduced to 8000?
@ADismalScience: I’m fairly sure it has been reduced to $8000. So, still a benefit for most first time home buyers.
Yeah, because precisely what our real estate sector needs is a gimmicky, smoke-n-mirrors, market-distorting, make-the-grandkids-pay-for-it hoohah.
Krugman said this would just be an incentive for people to flip their houses:
Helping the little guy? I am not sure how many $15,000 tax breaks people who are wealthy enough to afford a house really need — the depressed prices are incentive enough to buy if one has the means to do so.
@djanes1: I’m not wealthy. My wife and I combined made about $75K/year last year, before she was laid off. We’ve been saving for about 5 years to buy a house (and actually tried to buy a couple times over the last 3 years, but the monthly payments just didn’t make sense to me, so I held off in order to save a little more), and finally put 15% down on a house that closed at the beginning of this year. I’m aware of the $7,500 first-time homebuyer interest-free 15-year loan program, and would probably use it to help pay taxes, but I would have been ecstatic at a true $15K tax credit, especially with a mini-dorianh49 on the way this summer.
@dorianh49: I am not wealthy either, just frugal. We have scrimped and saved and been good little Consumerists to buy the house we are closing on the end of this month. We were planning on using the money to prop up our savings and start a college for the little-beana due end of March.
I was not thrilled when I read Krugman’s op-ed piece and saw him call it an incentive for the wealthy to flip. For us it was an incentive to go ahead and buy – which, really I think was kind of the point of the whole stimulus, no?
@KristinaBeana: Let me explain Republinomics to you, since you missed class during the last eight years. They write a bill whose benefits vasty accrue to the top 1% of the population. But they leave bread crumbs scattered across the table so they can trumpet the odd instance of a normal – that’d be the other 99% – population. Meanwhile, everyone’s kids are left holding the bag, to pay for it. (repeat as often as they can get away with it).
It’s generational theft, from the middle class – their children, really – to the dizzyingly high income earners.
They could have targeted it in a way that benefits you, and the rest of us, by simply adding an income cap. They didn’t since that’d alienate their base – the Paris Hiltons of the world.
@Trai_Dep: @KristinaBeana: @dorianh49: Well, you guys seem to be wealthy enough to buy a house. That is more than I can say for myself. House prices are already down significantly; the bubble has popped. Why does anyone need a tax credit on top of it? I understand that you want it, but why do you deserve it?
@djanes1: Yeah, I’m not wealthy either. Unfortunately, I bought my house before any of the first time home buyer tax credits were available. I wish there was a tax credit for people who have never missed or made a late payment on their mortgage. But I guess that would also be construed as a tax credit for the wealthy.
I didn’t want to buy a house anyway! Hmph.
Yeah, $15K credit is the dumbest thing I’ve heard… it’s a freaking mail in rebate for a house!
They want to give incentives for people to buy houses they need to do something else, like add more deductions for home owners under a certain level–will encourage continued ownership and new ownership
@emis: Or help create long-term, well paying jobs and let the housing prices continue to adjust to a level of affordability that is in line with wages.
So the $7500 one is still there correct?
The current version of the bill has an $8,000 credit (up from $7,500) for first-time homebuyers.
This actually makes sense…
Just like the $10K 15-year 0% APR loans available for people to perform certain energy efficient upgrades to their homes…
That’s a true way to stimulate the economy and help people–you get products made, workers working and home owners save money via reduced resource consumption AND the money comes back eventually.
@emis: do you have a link to information about this?
@dorianh49: Yes, I’m interested in this as well.
Actually, to my understanding this is not correct.
It has not been dropped…The senate version, offering the 15k credit was cut back to the original version from the house, which is an 8k tax credit.
So, a tax credit is still available, it’s not gone, just reduced to 8k. Also, this is only for first time home buyers.
Also, the house version required this to be paid back…The new version does NOT require it to be paid back. However, still unclear is if it is a refundable credit.
@PHRoG: I know it makes more sense to limit it to first timers, but when the law defines a first-time home buyer to include people who own vacation homes and rental properties but not spouses of homeowners whose name does not appear on the current mortgage, I don’t think that is quite fair. [www.federalhousingtaxcredit.com]
@cabjf: Absolutely…The greedy will always find a loophole.
@cabjf: Hmm, I precisely wanted to have the first house we bought be only in my name so that when we bought a second house we could still do all the first time home buyer stuff again (back then it was you could raid your retirement) but nobody would allow it. Also if anyone did there would have been an incredible amount of complications. So in practice this is very hard in IL.
I don’t see the problem for first time home buyers. My wife’s friend was able to get a loan in MN a couple of months ago. I just got a car loan. I think that if you have good credit you can still get a loan, and with first time home buyers not needing to sell a home I do not see much of a problem for them. I see that this will keep prices up, so does that stimulate the economy?
@PHRoG: Okay, these Consumerist headlines are getting out of hand. “Reduced tax credit to $8K and changed the stipulations” is nowhere near the same thing as “dropped [it] from the stimulus bill.”
Can we cut out the altered-for-maximum-impact headlines and get some kind of accuracy, please? I’m tired of waiting for the comments section to give me a more accurate picture.
@PHRoG: I read that if you move in three years you need to pay it back.
I’m not sure how much good this was going to do anyway. The majority of people who are teetering on the edge of buying a home could have been persuaded to take the final step with the tax credit, but a lot of people are probably looking more at their job stability. You don’t want to enter into a mortgage if you think you may be losing your job. The economy isn’t safe for anyone right now.
Guess they couldn’t figure out a way to make it a pork project, so they dropped it.
Good, people don’t need an incentive if they can actually afford to buy/borrow for a house. This would just pull people who are questionably able to buy a house back into the market which is one of the reasons we have a falling housing market.
The housing market won’t recover until median house prices fall to within 3x to 4x the median income. Until that happens any attempt to stimulate the housing market just prolongs the inevitable, because the houses are still too expensive.
I realize this really sucks for California, where multipliers were sometimes over 10x, but there’s no way around the math.
@David Brodbeck: And I think it will fall beyond that. 3x-4x may be affordable with silly-low interest rates, but when interest rates raise to more historically-typical levels prices will have to be 2x-3x.
@David Brodbeck: Gasp, are you proposing free-market forces could eventually fix the housing market?
It’s simple math, when it is cheaper to buy a house then it is to rent, and people are confident in their long-term job prospects, the housing slump will end.
Gimmicks like this only delay the inevitable and punish people like me who are waiting for affordable home prices before they buy. Tax credits, deductions and what not are a horrible reason to buy a house if the house is still overpriced.
@KyleOrton: Who needs young people when the Boomers are buying second and even third homes?
@orlo: With all that money they made in the stock market?
I know too many Boomers who consider their house a retirement plan. Just think how many houses will be on the market when they die/move to nursing homes.
@KyleOrton: Good. Houses are living spaces, NOT investments. Housing is susceptible to bubbles and speculation, with just as much risk as stocks and bonds. It is foolish to believe otherwise.
I’m not going to be able to purchase any sort of house until my income is at LEAST $45k a year for a $100,000 house.
By the time I do get a raise to that level, or have saved enough to make a considerable down payment, home prices will be back up in the $3-400k range again.
@Oranges w/ Cheese: Or live within your means like I do. I bought my house 8 years ago at the age of 24 for 20K. I was making about 12/hour then.
It’s a small 2br house but it was all I needed at the time.
@fatcop: Where do you live? I’m not sure I’ve ever seen a home for $20,000. Ever. And in the D.C. Metro area, if there is a home anywhere for $20,000 it’s probably someone’s shed, or you’ll probably get shot or robbed. Or spend much more than $20,000 renovating and fixing up a property so it’s suitable for actual residence.
@pecan pi: 20,000 is a parking space in the upper NW of DC.
Even in MI, home of the unemployed I have never seen any sort of home for 20K.
So where the heck do you live fatcop. Do you cuddle with bears and buffulo in that drafty shed in the hills?
@Oranges w/ Cheese: I’m not being mean by telling you that you’re wrong, I’m trying to reassure you.
If you’re an average person with average income and the market “prices you out forever,” it’s the market that’s screwed. Not you. No market on earth can survive by not allowing ANYONE to buy the product. If young people can’t buy entry-level homes then prices will drop until they can.
The reason this happened for a few years is that reckless bankers picked up the difference by offering stupid loans. As soon as that stopped, so did the insane appreciation and you’re back in the market.
Oh, and renting is awesome. If anyone tells you differently, pee on their toothbrush.
@KyleOrton: What if I stopped renting because my landlord was peeing on my toothbrush?
@samurailynn: Geez, I think we have the new NAR campaign.
@Tmoney02: Well, Michigan man, you need to travel to inner-city Detroit sometime. You can get houses there regularly for around 8-10k.
Mind you, they’re rat infested crumbling crack houses, but they do exist.
@mdmadph: yeah i forgot about those. Heck the consumerist even had a story or two about the houses in saginaw and detroit that were like $20 (plus a thousand or two in back taxes).
In my reference to MI though I was talking about a true livable home not surrounded by worse than third world conditions and crackheads and drive-bys. Something a little more tame.
@Tmoney02: Yeah, I’m not into Buy a Home Get a Shotgun Free deals.
Well…maybe if I can take the shotgun, and return the home?
@pecan 3.14159265: Yep. In my area, the median home prices are sitting around 269k. I’d love to see something in the 100-125k range in a *safe* location.
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