FOR IMMEDIATE RELEASE

WASHINGTON -- In its first policy report released under the new leadership of CEO Bruce Reed, the Democratic Leadership Council (DLC) outlined a plan to spark home purchases by expanding eligibility for the federal Homebuyer Tax Credit and advancing it so first-time buyers can afford to make a down payment.

In "Moving Houses: How Sparking a Housing Recovery Is the Key to America's Economic Recovery" DLC senior fellows Paul Weinstein Jr. and Marc Dunkelman note that the glut of foreclosures has obscured another crisis: reticence among many potential homebuyers to dive into the market. Few doubt that the housing bubble's implosion drove the nation into its current recession. But the authors compile evidence suggesting that an upswing in the housing market could also play a crucial role in turning the broader economy around.

Newly-installed DLC CEO Bruce Reed commented: "The housing market helped start this economic crisis. Getting homes moving again is crucial to speed the nations recovery."

Weinstein and Dunkelman make several recommendations, including:

• Expand the $8,000 Homebuyer Tax Credit to individual and family homeowners looking to move or buy a new home, regardless of whether they previously owned another. This expansion is estimated to cost $11.4 billion;
• Limit the credit by ensuring it expires at the end of the year, forcing those intent on taking advantage of the credit to get into the market in the short term; and
• Ensure that homeowners have access to the credit at closing by directing the Secretary of HUD and/or the Secretary of the Treasury to use existing authority (possibly through the Home Program or the Troubled Asset Relief Program) to set up a fund that would advance some of the down payment and closing costs.

Among the report's key findings:

• The turning point in five of the last seven recessions has been marked by the moment housing sales began to swing up again.
• The housing sector was responsible for over 75 percent of all job growth from 2004 through 2007.
• In the past year alone, existing and new home sales have fallen by 13.1 percent and 37.6 percent, respectively.
• Nationally, sales of existing homes fell 10.3 percent in February from a year ago, and the U.S. median sales price slid almost 16 percent to $165,400.
• The housing sector makes up approximately 10 percent of the nation's GDP.

In the last two months, the housing industry has received some good news. A study from the Commerce Department reported that new-home sales surged 4.7 percent in February to a seasonally adjusted annual rate of 337,000.

Unfortunately, the rest of the news on the housing front is still mixed at best. While some economists believe the housing markets have hit bottom, no one is declaring that housing is on its way to a recovery.

As part of the $787 billion stimulus plan, Congress established a temporary, one-year first-time homebuyer tax credit of $8,000. According to data from the National Association of Realtors, first-time buyers accounted for half of all home sales in February, with activity concentrated in lower price ranges. The fact that so many sales went to first-time homebuyers suggests that the credit is working.

"The Obama White House is working overtime to set the nation's economy back track," said Weinstein. "Making it easier for hardworking Americans to buy homes will add an extra spark to the economy."

Click here to download the full report.

For more information, or to speak with the authors, please contract Marc Dunkelman at (202) 546-0007 or mdunkelman@dlc.org.