Homebuyer Tax Credit...Obama Bailout?

HOMEBUYER TAX CREDIT... Obama Bailout?

Tuesday night the Senate voted to include a $15,000 homebuyer tax credit to the American Recovery and Reinvestment Act (a.k.a. the big Obama bailout).

Pushed through by Senator Joe Lieberman, the credit doubles the size of a tax credit passed last summer, which did very little to spark home buying.

This credit would likely not have to be paid back over time, as the previous one was.

"This robust tax credit will spark demand in our struggling housing market and offer real hope for economic recovery," said Lieberman in the press release.

An analysis by the National Association of Home Builders projects that the Isakson-Lieberman homebuyer tax credit amendment will have the following economic benefits in the first year after enactment:

• Increase home purchases by 499,700 homes,
• Create more than 255,000 jobs
• Generate $12.3 billion in wages and salaries and $9.7 billion in business income, and
• Yield tax revenues of $6.6 billion for the federal government and $2.1 billion for state and local governments.

The tax credit, while available to all buyers, is really only going to help a first-time home buyer who has good credit and money to put down on a 30-year fixed. It won't overcome the problems facing the bulk of potential butyers out there to have to sell their current home or don't have the good credit and downpayment necessary to take advantage of today's low mortgage rates.

I believe the tax credit is a good start but I hope it is not the finish because are problems are not begin with just first time home buyers.

What do you think about this? What solutions do you see out there? Please comment I would love to hear them.

I live in a 2.5 yr. old neighborhood and there are already 3 forclosures in my neighborhood.