What "Cash for Clunkers" did for automakers, the tax credit for first-time homebuyers is doing for the nation's housing industry.
Pent-up demand for homes showed itself last month. Home re-sales rose more than 10 percent in October, mostly fueled by the federal tax credit of up to $8,000.
Give some credit too to low interest rates and a housing market that contained some bargains. Nationally, Realtors say October's sales were the biggest in a decade and far better than what economists were predicting.
But just like the clunker program, every giveaway has its gloomy side. Some analysts are predicting more foreclosures and a higher rate of automobile repossessions.
Many of those who traded in "clunkers" also said goodbye to no payments and first-time homebuyers were likely renters or living with family. Vehicles were mostly paid off and now those new car owners have a car payment to reckon with.
The extension of the homebuyer tax credit should help the construction industry into the next year. A few changes in eligibility makes more folks able to take advantage of the credit.
