Giving away free money is a popular government program. Cash for clunkers boosted car sales this summer, though perhaps only temporarily. Now there are signs that a popular $8,000 tax credit for first time home buyers may be sweetened too.
The House of Representatives in Washington last week overwhelmingly to allow armed forces members in combat zones more time to qualify for the credit, which runs out Nov. 30 for other qualifying home buyers. Both the Senate and White House must also okay the idea before anyone gets any money, but it's hard to fault the logic. Home buying is often a long, complex, highly detailed process not easy to deal with when you are distracted by live ammunition.
Realtors want to extend or expand the credit even further, to all home buyers not just service members or first time buyers. It's good for their wallets too. It helps homeowners who aren't buying too. Our homes are worth more in stronger markets.
But let's check the math before we get too giddy. Contributors to the Calculated Risk blog calculate that each of the nearly two million home sales spurred by the incentives costs us $43,000 as taxpayers collectively. OK, that is split among more than 139 million taxpayers, but it's still way more than I paid for my first house 37 years ago.