04 August 2008 21:21 [Source: ICIS news]
Officials and industry executives with the National Association of Home Builders (NAHB) said the housing market relief measure signed by Bush last Thursday “will provide a real shot in the arm for the housing industry”, in the words of Richard Dugas, president of residential building major Pulte Homes.
The law approved by Bush provides a $7,500 (€4,800) tax credit to first-time home buyers and makes $300bn in loan authority available to the Federal Housing Administration (FHA), which insures home mortgages.
“The $7,500 first time buyer tax credit is the centrepiece of this effort, and it will stimulate home buying and reduce the inventory of unsold homes,” said Sandy Dunn, president of the home builders association and a home builder in
She said the $7,500 tax credit is “a significant financial incentive that will increase housing demand and get home buyers back into the market and shore up home prices”.
Dunn also said the $300bn in loan authority being made available to FHA will help existing home owners avoid loan defaults and foreclosures, which in turn will keep additional vacant homes from coming onto the already flooded market.
She said that the benefits of federal housing stimulus was proven in the 1975 congressional action that provided a $2,000 tax credit for new home buyers.
“Within nine months, that tax credit helped clear off a record number of unsold homes and helped the country dig its way out of a recession,” Dunn said.
Speaking in a conference call with reporters, Dugas said that first-time home buyers made up 20% of the
Ed Brady, a home builder in
($1 = €0.64)
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