Bush Cites Tax Cuts as Engine for Home Sales
WASHINGTON (Reuters) - President Bush (news - web sites) said on Saturday his tax cuts helped fuel the recent surge in home sales that has helped push homeownership to record levels in the United States.
The Republican president, whose re-election campaign this year has been hit by Democratic criticism over slow job growth, pointed in his weekly radio address to a gain in February home sales as evidence of a growing economy.
"More Americans can afford a new home. Incomes are rising. The unemployment rate is falling. Mortgage rates are low. And because of tax relief, Americans have more to save, spend and invest -- and that means millions of American families have moved into their first homes," Bush said.
The Commerce Department (news - web sites) said on Wednesday that sales of new homes rose a stronger-than-expected 5.8 percent to a seasonally adjusted 1.163 million annual pace in February.
Economists said the pace, the fastest since August 2003, indicated the housing market was drawing support from low interest rates, which the Federal Reserve (news - web sites) has held at a post-1958 low of 1 percent since last year.
Homeownership in the United States stands at an all-time high of 68 percent.
Bush has repeatedly called on Congress to make his $1.7 trillion in tax cuts permanent, a move lawmakers, including Republicans, worry would expand an already yawning federal deficit unless offset by spending cuts.
Democrats have also decried the tax cuts for reserving much of their benefits for taxpayers at the very top of the income scale.
The president's address featured many of the homeownership themes he voiced this week in the Southwestern battleground states of New Mexico and Arizona, where analysts said his support of efforts to increase minority homeownership could resonate with Hispanic voters.
Bush touted his signing of the American Dream Down Payment Act, designed to help low-income Americans afford the down payments and closing costs on their first homes. The president said he had asked Congress to provide an annual $200 million for the program.
He also emphasized his support for zero down-payment loans for first-time buyers whose mortgages are guaranteed by the Federal Housing Administration, more money for home-purchase consumer counseling and tax credits for builders who construct homes affordable to lower-income families.