Expanded housing credit still needed

By Johnny Isakson

On the 30th of November, the first-time home buyer tax credit expires. It is a byproduct of an original bill I introduced along with a number of members of the Senate to provide a $15,000 credit to anybody buying and occupying a home in America as their principal residence. It got parsed down and finally, in negotiations, became a first-time home buyer credit only, means-tested for incomes of $150,000 or less. It has had a positive impact on the market.

But America does not have a first-time home buyer problem. America has a move-up-crisis problem. Right now, no one who is in a house in the middle of the market, from $200,000 to $600,000, can sell their house. Transferees from Georgia to Washington state are frozen. They cannot sell in Rhode Island to buy in Florida. They cannot sell in Atlanta to buy in Washington.

The housing market is literally at gridlock. Most sales being made in the last few months are short sales and foreclosures, which is depressing further the value of housing. The few direct arm’s-length sales that are taking place are, in fact, spurred on at the lower end of the market by the first-time home buyer credit.

So I ask the Senate to think for a second: What happens on Dec. 1 when that credit goes away? Well, I will tell you. The worst month of the year is December, to begin with. Housing purchases are seasonal, and December, January and February are always the low months. If you take away the single impetus that exists, what do you have? Nothing more than short sales and foreclosures and a continuing decline in equities and values.

I would submit if we took the $8,000 housing tax credit for first-time home buyers, extended it to $10,000, made it eligible to anybody who bought and occupied a house as their principal residence, whether it was their first purchase or their 10th purchase, we would move more real estate and move more impetus to the housing market than it has seen in the past 24 months.

As we do that, consumer confidence comes back, equities and values come back, the borrowing power of the American public comes back, and our economy comes back. Failure to do so, and we remain in a quagmire where we are today, which is no legitimate sales, declining values, a loss of equity and a continuing high unemployment rate and a continued depressed marketplace.

Let’s pause for a second and realize the good that the tax credit has done so far, as limited as it was, and let’s make it better. Let’s extend it to July 1. Let’s make it $10,000. Let’s take the means test off. Let’s give an impetus to the move-up market. I would submit it is a part of the main solution we need to take an economy that is on the bottom and move it back toward equilibrium and prosperity for America.

Adapted from the U.S. senator’s
Sept. 10 floor remarks.