VIEWPOINT: Tax credit benefits everyone
BILL RILEY
Congress has expanded the tax credit for home purchases, extending the tax credit for first-time buyers for another five months. Lawmakers also made the tax credit available to some people who own a home now, but want to buy a new residence.
It’s a move that will put home ownership within reach of more Washington citizens while providing a badly needed shot in the arm for our economy.
The program already has sparked an estimated 7,000 home sales in a depressed housing market that was dragging the Washington economy down with it last winter.
The focus on first-time buyers is important because their purchases trigger a chain of home sales that benefits everyone in the state. The first buyer purchases a home, the seller becomes the next buyer, and so on. H.R. 3548 encourages that economic chain reaction by including a $6,500 tax credit for homeowners who would like to move up to a different home.
The impact of first-time home buyers is even more powerful because each of their purchases sets off a chain reaction of transactions throughout the economy. In fact, every 1,000 home sales to first-time buyers generate $112.4 million in economic activity. You don’t have to be an economist to understand why home sales play such a critical role in boosting the vitality of the economy.
Remember all those trips to the hardware store and garden shop the last time you bought a home? You might have hired experts in investment and real estate to help with the sale. Maybe you even bought some new furnishings to spruce the place up.
Each of those transactions involves a person in a job. Economists have found that for every 1,000 homes sold, the economy creates 700 jobs. That means the tax credit that prompted 7,000 home sales in our state also produced 4,900 jobs for Washington residents.
Job creation has to be a top priority because history has shown that employment is the last thing to recover after a recession. We can’t wait for jobs to come back to generate retail activity. People aren’t spending now because they’re out of work; they can’t get work until the economy recovers and generates jobs; the economy can’t fully recover without retail spending.
It’s a vicious cycle that the housing tax credit is helping turn around, generating the jobs people need in order to return to entertainment, retail, and other industries.
The turnaround in the housing industry cannot come too soon. The tax credit for home purchases benefits everyone. Regardless of whether they’re part of the transaction, they’re part of the solution.
In expanding the tax credit for home purchase, our congressional delegation — Republicans and Democrats alike —have placed Washington’s economy once again on the road to recovery.
Bill Riley of Puyallup is president-elect of the Washington Realtors.
