Home Builders Want Federal Bailout, Too

But critics warn adding to housing supply will only make things worse
By Katherine Thompson,  Newser Staff
Posted Nov 24, 2008 12:37 PM CST
Lennar Corporation is offering big incentives to home buyers looking to buy into their new home developments like this tract in Santa Clarita, Calif.   (AP Photo)
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(Newser) – Home builders, undeterred by the automakers’ troubles in securing federal aid, are campaigning for a $250 billion stimulus of their own, the Wall Street Journal reports. Saying that the economy can't recover until home prices stop tanking, the builders propose a plan, called “Fix Housing First,” where the feds would underwrite some percentage of new-home costs through tax credits and subsidies.

But not everyone is thrilled with this idea: Economists fear a push toward more building will keep supply and demand out of whack and extend US financial troubles. Others point out that past housing credits have only worked because of a growing economy. With so many people jobless, it’s harder to tempt them to commit to a new mortgage.