Federal Housing Credit: $7500 for New Home Buyers - Will This Movitate Buyers to Buy?

Ever hear of the Federal Housing Tax Credit? This $7,500 credit for new home buyers, or those who have not owned a home in the past 3 years, will be a nice tool to motivate real estate buyers. At this point, with the market hitting bottom and inventory being reduced due to the slowdown of builders, I believe this credit will help.

But there's no question that obtaining financing is still the major issue we face before this economy turns around. The continued tightening of credit increases the inability of homeowners to get loans. Add to that rising unemployment and you get the recipe that'll still hurt housing sales despite whatever the home is priced at.

Hopefully this $7,500 housing credit will stimulate sales regardless. But like with GO Zone investing, it's not a gimme - the government requires the credit to be repaid over 15 years, making it more of an interest-free loan than a credit. Ah, there's always the catch!