Builders: 4.5% Rates Not Low Enough to Lure Buyers

Mortgage interest rates of 4.5% will not be enough to lure homebuyers, according to the National Association of Home Builders, which is pushing for a government program to buy down rates to 2.9% and really stimulate sales. "Some of our homebuilding companies have gone out with 4.5% interest rates recently," NAHB chief executive Jerry Howard. "Although there has been an uptick in business, it is not enough to be called an economic stimulus." Congress is expected to pass an economic stimulus package early next year and home builders and a coalition of housing-related industries want the buy-down to be part of the package. With a 2.9% mortgage rate and an expanded homebuyer tax credit, it could help to eliminate the inventory of unsold homes in six to 12 months, Mr. Howard told reporters. NAHB also supports efforts to prevent foreclosures, including the Federal Deposit Insurance Corp. loan modification program. "Foreclosures need to be addressed," Mr. Howard said.