[quote=sd_matt][quote=Arraya]It’s no subsidy to the people for being tricked into buying increasingly over priced homes. It’s a crime against American people.
This is a last ditch desperate attempt to keep the whole banking system alive. Which will invariably fail.
FHA is practically giving subprime loans again. With an ever deteriorating real economy. Eventually, they will run out of buyers.[/quote]
Or maybe fence sitters will wait for ever bigger tax credits.
I still don’t quite understand the math in the article. Can someone here put it in laymans terms?[/quote]
Overly simplified: the subsidy of 1 million people at $15K should amount to $15K per house. However, only 20-30% are the additional buyers from the subsidy, not 100%; therefore, take $15B/(20-30%*1M)= 50K-75K, as the cost for each extra home bought with your subsidy money. Trick would be to give subsidy to only people who wouldn’t dream of buying without subsidy, but can’t really be done.
