With new data showing home prices and sales continuing to plummet, the Independent Community Bankers of America (ICBA) has urged Congress to quickly pass a first-time homebuyer tax credit as part of the pending economic stimulus legislation advancing in Congress. In March, the year-over-year median home price declined by the largest amount in nearly four decades, while home sales plunged to a 16-1/2 year low.
"ICBA is pleased that a version of a homebuyer tax credit is in both the House and Senate housing stimulus packages, but it is now time to get the job done," said Camden Fine, ICBA president and CEO. "To that end, it is important to keep any homebuyer tax credit clean and simple and model it after the successful District of Columbia first-time homebuyer tax credit. The IRS has the forms and procedures already in place for a proven $5,000 homebuyer tax credit in D.C. Now we need this same credit to apply nationwide to help homeowners throughout the country."
In January, ICBA introduced a Nine-Point Economic Stimulus Plan that calls for a one-year $5,000 first-time homebuyer tax credit to help jumpstart stalled home sales, reduce the 10-month supply of unsold homes, prevent plummeting home values, and stem growing foreclosures.
The broad credit markets have been severely damaged by the sharp decline in housing prices and the collateral real estate represents. When home prices drop sharply and people owe more on their mortgages than their homes are worth, foreclosures become a growing economic problem. Despite the Federal Reserve Boards sharp reduction in interest rates, recent data for March from the U.S. Department of Commerce showed home sales dropping nearly 20 percent in the Northeast, 12.9 percent in the West, 15.5 percent in the Midwest and 4.6 percent in the South.
The ongoing sharp decline in real estate values must be addressed before genuine stability can be achieved in the broad credit markets and economy, said Fine.
For more information, visit www.icba.org.