| Issue of the Day: Hurting Builders Look to Congress |
Published Monday, November 24th, 2008
Another industry, builders, tugs on the purse of Congress while the financial industry, this time Citigroup, gets $25 Billion to prop up its losses. Called ‘Fix Housing First’, the $250 billion package will, according the the builders industry, correct the housing price drop and thus fix the financial markets. To accomplish this, they want to introduce a tax credit of 10% of the home’s value up to $22,000 and a federal subsidy to lower the home mortgage rate from 6.2% to 3%. History recalls a similar package that was issued after the 1975 recession in which Congress gave a 5% tax credit up to $6000 and 1.5% drop in Home Mortgage Rate.
The Builder Industry has had an amazing rise in productivity in the last decade. The supply of over 2 million houses built each year as of 2007 and demand fueled by lenders were helping housing prices go through the roof and has created a situation where the builder industry has been pressured to build and build for a growing homeowner population. Now the reverse is occurring, where supply is outstripping the demand, causing the builders’ employment numbers to fall by 49,000 in October.
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November 26th, 2008 at 7:45 am
These are very interesting that you are writng. I am a big fan of the US, their history, traditions. I don’t agree with everything you are writing here on this blog, but I will definitely come back here to check what’s new. I try to spend every summer vacation in the US (this is my fav NY picture: http://www.odyssei.com/travel-gallery/107875.html). So see ya:)