According to the Harvard University based Joint Center for Housing Studies, when fully factored, housing and housing-related purchases account for nearly 23% of U.S. Gross Domestic Product.

Residential Construction accounts for 18.5% of Maryland’s Gross State Product.

Since 2007, housing-related jobs have dropped by 3 million.

The Home Builders Associations of Maryland represent over 2,000 member companies which equates to over 250,000 employees.

Housing may be more affordable now than at any recent time, thanks to lower prices and falling mortgage rates.

A National Housing “affordability index” estimates that affordability is now the highest since the index’s start in 1970.

Housing’s distress is too much supply chasing too little demand. Huge inventories of unsold homes have depressed prices and construction.

“Somehow, we need to cut bloated inventories, curb falling prices and stimulate new construction. The simplest way is to incent prospective buyers not to wait. For example: Give them a 10% tax credit, up to $15,000, on the purchase of a new home. Anyone who bought a $150,000 home would get a $15,000 tax break. The credit would expire in a year” (Robert Samuelson, Economist, Newsweek, March 2009).

“We are in a vicious cycle. The cycle has spread beyond housing, but housing is the place to fix it” (Hubbard & Mayer, Columbia University, Wall Street Journal, October 2008).

“To address the housing problem, Congress and the administration should take actions that increase the current demand for housing…there can be no full recovery without an end to the housing problem” (Meltzer, Carnegie Mellon, Financial Times, November 2008).

“The “unremitting freefall” might be ending, but what will be the source of growth? Usually residential investment (RI) and personal consumption lead the economy out of a recession- and both remain severely impaired this time. There is too much excess inventory”…in the residential sector (Lawrence Summers, Chief Economic Advisor to the President, April 2009).

“The housing market has frequently led the rest of the economy out of a downturn.  Given the first-time homebuyer credit’s singular success driving up demand, it is time to broaden its reach. We recommend that Congress quickly expand the program beyond first-time buyers” (Weinstein, Johns Hopkins University; Dunkelman, Democratic Leadership Council, Baltimore Sun, May 26).

The current focus on minimizing foreclosures and incenting first time buyers alone won’t revive housing. In order to truly “move the market”, Congress and the President must act boldly to implement:

·        A maximum $15,000 tax credit for buyers of primary or secondary residences.

·        Making the credit available for 1 year from date of signing.

·        An eligibility income limit of $500,000 per household.

·        A HUD program that will monetize the credit for state and local housing agencies so it can be used to assist with down payment or closing costs.

·        Appraisals that are based on foreclosed and distressed sales are unrealistically distorting home values across the market. This process which negatively affects both sales values and purchase financing must be terminated immediately in order to restore market equilibrium.

·        A full housing recovery cannot occur until the normal flow of credit for acquisition, development and construction financing is restored by lending institutions.