Surveys show doubts about stimulus

Recent surveys of Realtors and consumers by two real estate Web portals reveal some skepticism about the government's effort to turn the economy and housing markets around -- and suggest consumers put less faith in incentives for homebuyers than the industry.

A twice-a-year online survey commissioned by Trulia Inc. found that only 5 percent saw economic incentives for homebuyers as the single most important step the Obama administration could take to restore "the American Dream of homeownership."

Seven percent saw lower interest rates as the most crucial factor, while one in five said the biggest emphasis should be on getting banks to renegotiate the terms of financially troubled homeowners' mortgages.

Most of the 2,076 consumers surveyed Feb. 20-24 by Harris Interactive for the "Trulia American Dream" survey (53 percent) said "creating jobs and job security" were the single most important thing government can do to restore faith in homeownership.

The Obama administration says the $787 billion economic stimulus bill signed into law Feb. 17 could save or create 3.5 million jobs. But the bill contained less in the way of homebuyer incentives than some in the real estate industry had hoped.

HR 1, the American Recovery and Reinvestment Act of 2009, increased the $7,500 limit on an existing tax credit for first-time homebuyers to $8,000, extends its sunset from July 1 to Dec. 1, and eliminated a requirement to repay the credit. But many real estate industry groups favored a $15,000 tax credit for all homebuyers included in a previous version of the bill approved in the Senate.

HR 1 also restored the $729,750 loan limit for Fannie Mae, Freddie Mac and FHA loan guarantee programs in high-cost housing markets, which is epxected to help keep interest rates low for qualifying buyers of eligible home in those markets.

But in an e-mail survey of nearly 700 Realtors conducted Feb. 26 to March 4 by valuation site HomeGain, only 42 percent said they expected the stimulus bill would stabilize home prices or get them rising again in 2009. Another 45 percent said they would have no impact, while 13 percent said they would cause home prices to drop. ...CONTINUED

All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.