American Housing Recovery 2.0
Things have been developing very quickly since the American Recovery and Reinvestment Act was passed by the House of Representatives last week. I have been reading like crazy to try to keep up and I am thrilled to report there is FINALLY a real conversation about the housing situation going on amongst the decision makers in Washington. Did I say FINALLY? I am just one of many who believe there will never be “recovery” in this country without first addressing the housing crisis. The US housing market weaves through our entire financial system, the mess started there and it will end there.
We have been seeing it for months and it goes something like this:
- Housing market tanks,
- Banks that hold the mortgage-backed securities tank,
- Credit and stock market tanks,
- Consumer confidence (a.k.a spending) tanks,
- Jobs are cut,
- Life stinks.
OK, that may be a bit oversimplified but I’d say it’s fairly accurate nonetheless. That latest article I read says Republicans in the Senate are pushing hard for mortgage relief. One possible way is through an incentive program that would encourage banks to loan at 4 – 4.5% interest rates. Those mortgages would then be purchased by Fannie and Freddie. These rates would be available to new purchases as well as refinances for qualified individuals. Rates have been dipping in and out of this range for over a month but since the Fed can’t drop any lower there has to be another way to go about it.
Discussions also continue to focus on expansion of the $7,500 tax credit. It seems like everyone is getting on board with extending the deadline to the end of year and increasing the amount of money. The latest report says Republicans in the Senate are proposing a $15,000 credit to all homebuyers through the end of the year. Now we’re getting somewhere…
And then there is the Troubled Asset Relief Program (a.k.a TARP) money. We all know by now that the first $350 billion has been misplaced, oops. However, the new President claims he will do a better job keeping track of the second half. Many speculate on the creation of a “bad bank” to take over the toxic loans. The theory is that if the bad loans are off the books and the banks get a bunch of money to loan out (NOT pocket), then lending will resume. I’m not sure I buy it but I’ll certainly keep you posted!
UPDATE 02.05.09: $15,000 Homebuyer Tax Credit
Check out some related information:
American Recovery and Reinvestment Act
Update! NAR Housing Stimulus Plan
Hi, I'm Jake...and that's my dog! By day I'm founder and Chief Geek at MyUntangled Media, LLC and Executive Director of Business Development at Barrett & Company Real Estate . By night I am part struggling musician, frustrated writer, wanna-be chef and obsessed dog owner. I started this site mainly to learn WordPress, work on my design and writing skills, and showcase some folks with all kinds of talents and great stuff to say. (Read the long version if you dare) and please introduce yourself over on my Google+ Profile!
