Homebuilders ask Congress for 10% Tax Credit for Buyers

Homebuilders have asked Congress to enact a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year. They also are seeking a temporary interest-rate reduction on 30-year mortgages.

Government incentives are needed, homebuilders contend, because many buyers are fearful of jumping into the housing market due to uncertainty over the economy and how much longer the three-year slide in home prices will continue.

"We have seen no improvement over the past month in terms of sales conditions for new homes," said David Crowe, the association's chief economist. "In fact, certain factors have gotten progressively worse, not the least of which is the job market, where massive layoffs are having a devastating effect on consumer confidence."

Major public builders such as D.R. Horton Inc., KB Home, and Centex Corp., have seen their stocks hammered as housing woes have worsened.

The latest builder index reflects a survey of 426 residential developers nationwide, tracking builders' perceptions of market conditions.

The builders' gauge of current sales conditions fell one point to eight, while expectations for sales over the next six months declined two points to 16, the NAHB said.

The index of foot traffic by prospective buyers remained unchanged at a record low of seven.

Regionally, builder confidence declined in the Midwest by one point to six. In the South, it slipped two points to 10. The index held steady in the Northeast at 11 and rose in the West by one point to seven.