That doesn't sound right. If a person purchases a home and is capable of selling their current home, that sounds to me like it would have a positive net effect on the market. Currently, too many homes simply sit on the market waiting to be sold. Housing prices were too high before, but now many homes are being priced below replacement value. When people are required to put down 20% for a new mortgage, that really prevents even people with confident in their income from joining the market. I'm sure a $15k tax credit will go a long way towards helping these people become involved in the market. Homeownership isn't a panacea, but you treat it like some assault on poor people.

If a person buys a home, but sells their current home, it has no net effect on the market.

You're right. The effect on price stability will be marginal at best. However, this should improve mobility of people who are "trapped" in their house and need to move for various reasons: family, job relocation, move-ups into larger houses, or people nearing retirement to "downsize" into a smaller home.

There is a possible dark side to all of this however. If this ends up encouraging people to sell more than it encourages people to buy... it could end up flooding the market with more inventory and have the paradoxical effect of pushing prices even lower than they would have been. Eeek.

Home ownership is not an assault on poor people, but economic proposals by Republicans generally are. This is something which anyone should have learned over the last 25 years, but reporters refuse to ask why a proposal is really made, or who actually benefits from it.

You didn't specify for sure, but I don't think the Isakson amendment is supposed to supplant Section 36 first-time homeowner credits. I think it's supposed to be an additional system for the well-off, that will (in my opinion) have the economic effect of mooting the refundable credits for lower/middle income starter families.

On the plus side, the bill is supposed to eliminate the recapture requirement from Section 36.

This credit does nothing to alleviate the underlying problem that builders built more houses/condos/apartments than were needed. And then immigrants started leaving because of the lack of work here making the problem even worse. Builders have already been slashing prices to move inventory, this tax credit is so builders can sell houses for $15,000 more than they are worth (and real estate agents get commissions based on the higher price).

Th, I think there will be more sellers moving into smaller homes or renting instead of moving up to larger homes. Boomers nearing retirement will exaggerate this. That would skew demand for smaller existing homes and away from larger new homes, so I don't think it will do much for builders. It WILL do a lot for real estate sales brokers. Lots of commissions to churn here.

drop the Isakson version in conference. He's never going to vote for the bill anyway. Give part of the saved funds to Specter for NIH or other things he likes, and part of it back into more stimulative things like aid to states, food stamps, etc.

Oddly enough, Isakson was a relitter.

I think we should put together some system to enable people to take advantage of the tax break--sort of like online house-swapping, but without the worries about the carpet and pet care and stuff. We could all help one another to make some money here.

This is just another proposal from Congress so they can say they are doing something about the problem while actually giving tax breaks to the well off.

In order to use all of the credit in the first year you will need about $80,000+ in taxable income after deductions and exemptions. So the full benefit will likely apply only to six figure incomes. Besides only the well off will be able to obtain a loan. Of course the abuse will be huge. Some crooks will come up with a new version of liar loans to ta brokers come up with more crooked deals to take peoples homes.