Senate seen extending a reduced first-time home buyer tax credit

The U.S. housing sector has shown signs of stabilizing, as new and existing home sales have trended up for more than a half-year. Still, economists and housing sector analysts are careful to point out that this year's gains follow the largest collapse of new/existing home sales in more than 25 years, hence the sales gains are starting from a low base. In sum, conditions in the sector have improved, but at this juncture the growth/activity could hardly be categorized as self-sustaining.

Housing Analysis: A better tack would have involved extending the full $8,000 through homes that close on/before December 31, 2010, or at minimum, on/before October 1, 2010 -- to give the housing sector one more year, or in the case of the latter deadline, one more summer selling season -- to stimulate sales and help jump-start the sector. But given the nation's other problems/concerns, including the budget deficit, a half-loaf from Congress is better than none.

Arguments can be made on the fairness of the program -- it provides a benefit to those citizens who are first-time home buyers over those who are not -- and who may, for example, remain renters. But little counter-argument can be made against the program on demand grounds. Simply, the U.S. economy needs all the demand it can get -- from consumers, business investment, exports, government spending -- to help offset the demand destroyed with the loss of more 7.2 million jobs during the recession. The nation needs all hands on deck to get the U.S. economy moving again.