'Fix Housing First' Calls for Higher Tax Credits

Washington, DC, Jan. 29, 2009--Home builders and real estate agents called on Congress to revamp home buyer tax credits and to buy down interest rates for new homeowners as part of the economic stimulus package under debate this week.

“Housing must recover for the economy to recover,” David Lereah, president of Recon Advisers and former chief economist of the National Association of Realtors, said during a conference call Wednesday by the housing industry's Fix Housing First Coalition.

The coalition, which includes the National Association of Realtors and National Association of Home Builders, and major manufacturers, among others, called on Congress to give new homeowners a $10,000 to $22,000 tax credit, which could be paid at closing to cover down payments.

They also asked for the federal government to buy down mortgage interest rates to between 2.99 and 3.99 percent. The incentives would be limited to homes bought as primary residences in 2009 and to single buyers with income up to $125,000 and married buyers with income up to $250,000.

The proposed housing incentives would cost about $150 billion, much larger than current housing stimulus plans under consideration. The coalition says the price tag is necessary to get new qualified buyers into the market.

The $7,500 interest-free loan announced for first-time buyers has failed to draw significant attention because it must be repaid and only addresses a portion of the home-buying market, coalition members said.