Realtors suggest how to fix housing market

Realtors have an idea that they think will jump-start the ailing housing market. No, it's not a new multi-media campaign with the tag line "Now's a great time to buy a home." It's for the federal government to purchase loan points for new borrowers so interest rates would be 1% lower, thereby propping up housing values. Of course there are also detractors. From a Time magazine story (hat tip: Brian McDonald):

The National Association of Realtors is lobbying for the government to artificially lower mortgage rates by purchasing loan points for homebuyers. They say the program would cost $100 billion, and could raise home prices by as much as 4% nationwide. Anyone buying a house for primary residence would be eligible for the mortgage-rate buydown, which would lower a purchaser's loan rate by 1% for the life of the loan. They say the incentive should be made available for the next 12 months...

But some housing market economists question the wisdom of the move. They say helping people who may buy houses in the future is not where the government should be providing assistance.

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