Dropping inventory to boost market

David Crowe, senior staff vice president of the National Association of Homebuilders, Mark Zandi, chief economist at Moody’s Economy.com, and CNBC’s Diana Olick discussed home purchase stimulus options on CNBC last week, in the wake of recent data about the drop in home prices and new home starts in 2008. There were not enough new homes started in the U.S. in 2008 to replace homes taken out of the inventory due to fires, condemnation and other problems. The dropping inventory will, however, help the housing market return to normal, the panelists said. Crowe argued that a temporary tax credit for home purchases will help to stimulate home sales and work through the existing home inventory.