Thousands of South Jersey homebuyers currently standing on the sidelines will have the opportunity to live the American dream in a home that they can now afford to buy if the U.S. Senate passes the badly need housing stimulus package before Congress adjourns for its August recess, according to the Builders League of South Jersey.
The landmark Housing and Economic Stimulus Recovery Act of 2008, H.R. 3221, which has passed the House and is expected to be approved by the Senate this weekend, includes an all-important $7,500 temporary home buyer tax credit for qualified first-time buyers that will stimulate home buying and reduce excess supply in housing markets. The tax credit can be used for homes purchased between April 9, 2008 and July 1, 2009.
"Going home to a place you love to live in is the essence of living the American Dream," said Builders League of South Jersey President Robert H. Brown. "Having the Federal government give you that last boost you need to make it happen, makes putting down roots even sweeter. Our families and our communities desperately need this legislation to energize the region's economy and release some of the pent-up demand in the housing market."
The legislation also includes several other provisions to help revive housing and the economy, including FHA modernization, reform of housing government sponsored enterprises Fannie Mae and Freddie Mac, expansion of the mortgage revenue bond program and enhancement of the Low Income Housing Tax Credit to help spur production of badly needed affordable rental housing. The Builders League has joined the National Association of Homebuilders in urging Congress to pass the legislation.
While New Jersey does not suffer many of the woes of the national housing market, with excessive inventories of unsold new and existing homes, this legislation would release some of the idle demand in the region's housing market.
"Many buyers, especially first time home buyers and those considering their first move-up home, have decided to wait and see how prices and incentives adjust further," Brown said. "Fortunately we don't have a housing market that's spiraling out of control like other areas of the country. The market is beginning to move again, albeit slowly. Those buyers who have decided to stay on the sidelines and time the market may just miss the best time to buy a new home in decades. Giving first-time homebuyers a hefty tax credit will improve affordability. When more people purchase their first home it will ultimately stimulate the entire housing market in South Jersey.
"A few years ago many first time buyers were simply priced out of the market in New Jersey. Now it is much closer to reality for them," Brown said. "They may find buying a home today is a much better and more competitive investment than renting. It's certainly a much better way to start a home and get established in the community they want to live in."
SOUTH JERSEY ECONOMY: Housing is vital to the local and state economies, creating jobs and generating taxes and wages, which positively influence the quality of life in a community. According to an economic impact study conducted in South Jersey by the National Association of Home Builders in 2002:
- Buyers of newly built homes will spend an average of $8,900 - or about five percent of the purchase price - to furnish, decorate and improve that home within the first year. That's more than twice the average spent by non-movers.
- In the first 12 months of ownership, buyers of existing homes spend about $4,000 more than non-moving homeowners in home decorating and improvements.
Editors' note: Listen to builders' reactions to housing market conditions in South Jersey at www.buynewitstime.com.
ABOUT THE BUY NEW, IT'S TIME CAMPAIGN: The Builders League of South Jersey launched a public information campaign this spring to address some of the misconceptions about the real estate market in South Jersey, as it compares to the housing market nationally. The campaign works to provide pertinent information on market conditions and trends so residents can make more informed decisions about where they live in the future. To listen to audio and video files on housing market conditions in South Jersey visit www.buynewitstime.com.
ABOUT THE BLSJ: The Builders League of South Jersey is a housing industry trade association of builders, developers, suppliers, subcontractors, lenders, consulting professionals and others involved in providing residents with places to live and work in South Jersey. The Builders League is committed to promoting balanced solutions for solving New Jersey's housing needs while planning for preservation, environmental protection and economic growth.
The Builders League which is comprised of firms from Burlington, Camden, Gloucester, Salem, Cumberland, Cape May and Atlantic counties, is an affiliate of the New Jersey Builders Association and the National Association of Home Builders. For more information on the League visit www.blsj.com.