The Housing CRISIS--Is it really that difficult to stabilize???

I recieved a copy of a letter from Ameridream today, they wrote to our new President urging him to pass the H.R. 600, the FHA Downpayment Reform Act. I have been a real estate broker  for 20+ years---almost 1/2 of my life, and for some reason, I just cannot understand why our government cannot come up with a plan--and quick--to stabilize the housing market. I feel like they cannot see the "Forest thru the Trees"---We do not need to spend billions of dollars to jump start the market--We just need the 1st time homebuyers back in the market---ITS JUST AS SIMPLE AS THAT, Right? We know there are plenty of people who want to move---up, or downsizing to a smaller home--unfortunately, they are unable to sell their home or condo to move on---we need to look past the 2nd and 3rd type properties and look at the start---the beginning---the properties that 1st time homebuyers usually purchase--condos, townhomes, and smaller lower priced SF homes---this is where it all begins--The 1st time homebuyer purchases their 1st home and the sellers move on to there 2nd, the 2nd moves up to the 3rd and so on......SIMPLE---so where did the 1st time homebuyers go? With the media reports, I wouldn't be so quick to buy a home right now either---the prices could keep falling and then what?.......Well, interest rates are GOOD--some may say great--The Fed has inched the rates lower and have kept them stable---the inching bit by bit lower is almost like our unrealistic sellers---Chasing the market down w/small price reductions "here and there"---we all know what happens then---not enough to cause some quick activity, so in 30-60 days they reduce again---just not enough for buyers (the few that are out there ready to purchase) to say--this is a great buy---so this happens repeatedly---over and over again--they actually lose momentum and MONEY!!

So where is this leading??? To a plan, I think, knowing what I know, seeing what I see for the past 20+ years--We are the ones that deal with sellers and buyers everyday--We are not so far removed that we do not understand what the major concerns are--we are the ones, "Down in the Trenches" and I believe we are the ones that are in the closest contact with the very people that could get the market moving again---Right?

I think the Government could cause some real activity--Quickly--and without having to spend billions of dollars by doing something--Pro Active, and NOW! Instead of all this bail out talk--Lets start at the beginning--the 1st time homebuyers---lets offer them the best deal--and not keep it open ended--lets put an expiration date on it--say 12 months. Lets give them something they cannot refuse--no matter how the media keeps repeating the "Doom and Gloom" situation. What can we offer to make them get "back in the game"? Something new, Something unheard of, Creating a sense of urgency--- If the Qualified 1st time homebuyer was offered a government loan, lets say 3.5%--NO POINTS--30 Year Fixed rate--(never been offered--at least to my knowledge) for properties purchased in the next 12 months--Don't you think we would create the "Perfect Storm"--Home prices at an all time low--Interest rate at an all time low--I truly believe this would work--and guess what?---they would actually be making money rather than spending it---sure 3.5% is not a load of interest---but it is sure better than nothing, and WAY better than taking money out of the American pockets, and remember, most people move w/in 3-5 years after their home purchase--Just my opinion, but it seems pretty simple to me.