The National Association of Realtors (NAR) announced at its annual convention last week that the organization will seek out a stimulus plan to help the U.S. housing market get back on its feet. They would like assistance from the federal government with buying down mortgages (lowering rates to 4.5%) and adjusting conditions of the $7,500 income-tax credit for first-time buyers.
Under the plan, some of the fees home buyers pay to decrease mortgage rates (called points) would be covered. This results in more affordable monthly payments, which will entice more buyers to enter the marketplace. NAR analysts predict the impact could equate to the absorption of 800,000 homes in the coming year.
Currently, the income-tax credit is only available to buyers who have never bought a home before or have not owned property in the last three years. Also, those who qualify must pay back the money within a specified period of time (so it’s like a zero-percent loan). The NAR would like change these stipulations to include all buyers and drop the clause about re-paying the amount.
With a new administration coming to the White House in January, NAR representatives are hopeful that a proposal such as theirs would be approved. Estimates of the cost to government for the stimulus plan are approximately $100 billion, according to NAR Chief Economist Lawrence Yun. He explains that the funds could be enough to get the national housing market moving again and subsequently strengthen the country’s economic footing.