It seems that the housing stimulus proposal that Johnny Isakson’s was able to get added in the Senate stimulus bill was scaled back significantly in the conference committee.

The latest information indicates that a home purchased as a primary residence before the end of August 2009 will qualify the buyer for a $8000 tax credit.

I will be sure to stay on top of this story and let you know if it actually gets signed into law.  All the best,  Jeff

It appears Georgia Senator Johnny Isakson does not believe in free markets and limited government.  I read few news articles about the housing proposal that he is trying to push into the latest stimulus bill at a cost of $20 billion dollars.  The following description of his proposal is taken from an article found here:

“Specifically, Isakson’s Fix Housing First Homebuyer Tax Credit legislation would also enhance the existing homebuyer tax credit by:

• Extending the eligibility period for the credit to December 31, 2009;
• Increasing the credit amount to 10 percent  of the home price capped at 3.5 percent of FHA loan limits (geographically dependent) – ranging between approximately $10,000 and $22,000;
• “Monetizing” the credit so it is available at time of closing; and
• Allowing the credit to be used in conjunction with mortgages financed by state or local bonds.”

I read the full article and I bet he is right, it would spur some activity in the housing market but at what cost? Not only does it cost $20 billion but what happens to the market as soon as the incentive runs out in 11 months?  I guess sales and prices will slide back again using the same logic he uses to support his ill conceived proposal. Read the rest of this entry »