The Government, meaning our elected lawmakers, have decided to reward home buyers with some of the paper printing that is currently all the rage in Washington. $8000, if you buy a home this year, will be applied to taxes owed, or simply mailed to you if you owe less than that amount. If you stay in your house for a minimum of three years, then the money is yours to keep. Of course, you won't keep it, you will put it back into the economy by buying furniture, lawnmowers, rakes and shovels, etc. You see, the catch is that you have to be a new homeowner, not having owned a home for the last three years. So you need all of this stuff to make your home look pretty and maintain it inside and out.
The Utah legislators, jumping on the bandwagon, have decided to contribute another $6000 toward your financial wellbeing, but only if the house you buy has not been previously lived in! In other words, let's clear out the standing inventory of new homes on the market so that builders can go back to work building more of them. There is no new homeowner requirement for the Utah windfall.
Money printing is not so readily available to the individual states anymore. That was phased out long before our granddaddies were born, but Utah can get money from the Fed's, so they alloted $10 million for about 1660 grants at $6000 each. In other words, there is a limited supply, unlike the Fed's promise of tax credits and cash for any "first time" homebuyer.
Like all of the government meddling in financial affairs, these programs move money around from one pocket to another. Some give and some receive, and most of us do some of both, one way or another. Sales of new and existing homes seem to be picking up under the warmth of all this government attention, plus some nicer spring weather and most likely, a pent-up demand for homeownership.
Is this a bottom? Everyone and their financial advisors are looking for one so they can move on with their plans, having some feeling of security. Will the sales stay ahead of the foreclosure rate? Will the long term results bring economic stability and happiness to all? Time will tell.
