The National Association of Home Builders (NAHB) called upon Congress to extend the first-time homebuyer tax credit after the construction of new single-family homes slowed three percent in August to a rate of 479,000 units, ending a five-month run.
“With the $8,000 first-time home buyer tax credit set to expire at the end of November, the window is now basically closed for being able to start a new home that can be completed in time for purchasers to take advantage of that,” said NAHB Chairman Joe Robson, in a press release.
“Builders are therefore pulling back on new construction at this time. Clearly Congress must act now to extend the tax credit if we are to keep the market moving toward a recovery.”
Talk about laying on the pressure for the tax credit extension; the NAHB also noted that builders continue to grapple with a “severe lack of credit for housing production loans” and “inappropriately low appraisals” tied to distressed properties.
“Both of which blunted the tax credit’s positive effect. Together, these three challenges threaten to completely stifle the upward momentum we’ve seen in the first half of 2009,” said NAHB Chief Economist David Crowe.
I would guess that the homebuyer tax credit gets extended past its current expiration date; there are simply too many interested parties with too much to lose.
Similarly, the Feds will probably continue to buy up mortgage-backed securities to keep interest rates artificially low; the appraisal issue is the only question mark.
Perhaps the builders could try lowering home prices instead of relying on “affordability” measures offered by the government; or stop building so many houses…