HUD secretary, Shaun Donovan, was recently interviewed on CNBC about why the Obama administration is proposing to decrease tax credits for mortgages in a time when they need to stimulate demand for housing. I have to agree with Larry Kudlow that they’re making things worse. I’ve been getting this sinking feeling lately whenever I hear more plans for bailouts and economic recovery. The worst part is that I can’t do anything about it.
Donovan points to the new $8,000 tax credit to first time homebuyers which in reality was supposed to be $15,000 as proof they’re stimulating demand for housing, but it’s not gonna make a dent as far as I’m concerned.
The interview also points out that 45% of the sales that occured in December were distressed sales. There’s clearly no slowing of foreclosures and homeowners are now competing against banks to get homes sold. The sad part is that the banks are receiving bailout money from our tax dollars to gain an unfair advantage over the average tax paying citizen.
The stock market is now at a 12 year low and something must done… but definitely not what Obama has in mind. I mean no disrespect to our current president, but I don’t have to agree with his plan to fix housing.