NAR Existing Home Sales Estimate (February 2008) - 5,030,000 (1)
Census New Home Sales Estimate (February 2008) - 590,000 (2)
Total Home Sales Estimate - 5,620,000

Less ineligible existing homes - 1,666,000*
Less ineligible new homes - 195,000*
*(Total investment/vacation homes (3) + nonconforming homes - fraud)

Total eligible sales - 3,759,000
Tax credit per sale - $10,000

Total cost - $37,590,000,000

If this plan increases home sales by 10%, total cost will rise past $40 Billion, a rise in sales of 20% will increase the total cost to $45 Billion. If this program reignites the boom, and sales surpass the 2005 peak, total cost will far exceed $70 Billion.

Where is this money coming from?

(1) Source: NAR Existing Home Sales February SAAR Estimate.

(2) Source: U.S. Census Bureau New Home Sales February SAAR Estimate.

(3) Source: NAR Vacation and Second Home Sales 2007 Estimate.

From MarketWatch.

House lawmakers propose home-buyer tax credit

Home buyers would get a $10,000 tax credit for their purchase under a bipartisan House bill proposed on Wednesday.

The bill, a response to the sluggish housing industry and its drag on the overall economy, was unveiled by Reps. Vito Fossella, R-N.Y., and Bill Pascrell, D-N.J. The temporary credit would apply only to those planning to live in the home and could only be claimed by taxpayers once, making speculators and flippers ineligible for the perk.

But the tax benefits won’t last for long; the credit would expire one year after enactment, according to a release from the two lawmakers. A tax credit reduces an individual’s tax liability on a dollar-for-dollar basis.
To be eligible for the credit, home purchases would have to meet the new temporary conforming loan limits approved in the economic stimulus package, according to the proposal. The limits are now equal to 125% of the area’s median home price, up to $729,750. The bill also includes an alternative-minimum-tax blocker to protect people who claim the credit, according to the release.