Note to Home Builders: It’s the Jobs Stupid!

First it was the banks, and then it was the mortgage companies followed up by big auto. Then back to the banks again. Now home builders are applying pressure in Washington through their lobby for a $250 billion stimulus package of their own to save their industry from what I am sure they would classify as total annihilation.

But unlike the auto manufacturers, the home builders came prepared, at least with a slogan. They are calling their plan the “Fix Housing First” plan. The way home builders see it, a recovery in housing is what is needed in order to jump start the economy. The plan would provide new home buyers a tax credit of 10% of the home’s value, capping it at $22,000 along with federally subsidized mortgage programs. Problem is it isn’t housing.

It’s the Jobs Stupid!

We are way past the housing market saving this economy. Unemployment is shooting through the roof while companies try and figure out how to survive to fight another day. Ask yourself personally what it is that worries you more, housing or your job?

Citigroup just got bailed out over the weekend to the tune of $326 billion, so the home builders figured why not. Problem is, what about the massive inventory of existing homes? What about all the homes in foreclosure? Don’t we need to get those sold off before we put another shovel into the ground?

A record 1.2 million homes were in foreclosure during the second quarter of 2008. That represents 2.8% of all outstanding loans, up from 1.4% of all loans during the same period a year ago according to a report released in September by the Mortgage Bankers Association (MBA). And to make matters worse, another 490,000 of the 45 million home mortgages serviced by MBA members began new foreclosure proceedings in the same month. It just doesn’t seem prudent to provide a stimulus package to only half of the housing market.

But that isn’t going to stop them from asking. But maybe I just created the argument for the National Association of Realtors to pitch Washington for an existing homes stimulus package!