It all seems geared to "re-inflate" the real estate bubble because real estate construction cannot be outsourced, puts people to work immediately, and ripples through the economy in real time. That's why the Cheney Administration put real estate back in play, trying to repeat their success in the late 80's with the S&L real estate loan scams. The assertion that this was all an unfortunate accident is baloney, the Republicans knew exactly what they were doing.

Rather than adopting policies that designed to stabilize and absorb the overhang of foreclosed properties, the government is encouraging new construction in an allready overbuilt market. Smart, Mr. Lieberman.

New construction should be priced normally with below market subsidized assumable loans, via bank bondholders, to stabilize the bubble home prices at competitive cost but higher price.

The politically significant part of the $15k may be the 6% (or more) of that which goes to realtors.

I didn't phrase the last comment strongly enough: If you were to sell your home to your brother through a broker, the two of you would have no net gain if the price exceeds $250k.

I agree, money for house transactions benefits the realtors too much.

Better to spend that money changing the mortgage tax deduction into a tax credit.
Why should a higher income person have more of a benefit from borrowing money than a lower income person ?

(Deductions are better for higher marginal rate payers)

Zinc, the subsidy would apply to both new and used homes.

If you were to sell your home to your brother through a broker,

If you use a broker to sell your home in this kind of scam, you're an idiot. Come on. And the thing is you can sell your house to your brother and buy his as well, so you both make $15 grand.

OK, Dean and QrazyQat are right, the bill favors brothers (and sisters) and any other collaborators who get together to make a transaction without brokers. In that respect it could be a pro-family subsidy.

But consider transactions which do involve brokers (6% commission) in which the price is about $250k. This is actually a pretty representative real-estate transaction. The buyer gets $15k and the seller pays $15k to the broker. Net to broker: +$15k. Net to rest of economy (buyer and seller): 0. Net to taxpayers: -$15k. Anybody want to bet that this bill was not written by the real-estate industry?

As Dean has said, any government spending is stimulus, but one would think it is better to give some help to sellers, who may have lost a lot in equity recently, instead of buyers and real-estate brokers.

How about a $15,000 subsidy to rent a house? That makes more sense, doesn't it?

Anecdotally, I haven't heard of brokers still getting 6% anymore. More like 4%, since many people can use discount web sites, do-it-themselves with perhaps a one-time lawyer's fee, etc., so brokers have to discount.

Closing costs where there is a mortgage are typically 3-6% of the purchase price in NY

Well, maybe you can't create a good con, but if you are going to buy a house anyway, the 15K would be money in your pocket above what would have been there anyway, so it would be an encouragement to buy. Not that I would be in favor of re-inflating the housing market.

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