The Free Press, Mankato, MN

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October 26, 2009

Your View: Extend tax credit for first-time home buyers

Amy Scott, executive officer , Minnesota River Builders Association

The recession fever may have broken, but the economy is still weak.

Even as the economy begins healing, unemployment continues to climb. In the housing sector, foreclosures threaten stabilization in housing prices, builders have been cut off from the credit they need to finish viable projects, and the housing finance system is in disarray. While the Mankato housing market is stronger than other parts of the country, we are a part of the overall national economy and are feeling the impacts of the weakened economy.

The National Association of Home Builders states that extending the $8,000 tax credit for first-time home buyers for an additional year and expanding it to all buyers of a primary home, within eligible income limits, would increase new and existing home sales by 383,000 and housing starts by 82,000. It would create more than 347,000 jobs, generating more than $16 billion in wage income and $12 billion in business income, yielding $8 billion in federal taxes and $3 billion for state and local governments.

Some might question the need to extend a program that has already experienced some success. But you don’t let the patient out of the hospital until the patient has recovered. The housing market hasn’t recovered.

The credit that expires Nov. 30 has helped 1.4 million taxpayers buy homes. Still reeling from the most devastating downturn since World War II, housing is only beginning to recover. The federal government’s role throughout this crisis has been indispensable. Allowing housing to suffer a relapse is the last thing the economy can afford.

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