Federal Housing Tax Credit
Has the Home Buyer Tax Credit been effective? A story from the NY Times yesterday reports that Realtors and other real estate industry professionals declare it a success as it spurred sales with buyers who may not have otherwise bought a home. However, there is question as to how cost effective the $12.6 billion in credits through end of February in spurring on the market.
“There’s a political appeal to offering government aid to homeowners because it affects a lot of people,” said George K. Yin, former chief of staff of the Congressional Joint Committee on Taxation, who now teaches at the University of Virginia. “But if you weigh the cost and the results, you have to wonder whether it’s a failure of imagination.” 1
Something I think the story failed to explore is what will happen when all the money has finally been paid out. I have heard that a lot of home buyers have not received their checks yet. As the economy levels out, people will probably spend their checks so the full results may not be known until this time next year.
I’m not blessing the politics of this one way or the other. But, this has been one of few programs that have put money directly in the hands of consumers.