The current $8,000 tax credit available to first time homebuyers is set to expire November 30, 2009. Lobbyists for national housing and broker associations are campaigning to have the credit expanded and extended for an additional six months to a year in hopes that the credit will continue to lure buyers into the housing market. Extension proponents cite the many “trickle-down” benefits of the credit extension (i.e., sales of furnishings, appliances, etc.), and Congress members have responded by introducing bills to grant the extension.
The affordability of housing is too populist a political issue for Congress to abandon, hence expect the extension bill to pass. Given the size of the federal deficit though, it is unlikely that the credit would be expanded or offered to those other than first-timers buying newly-constructed or real estate owned inventory.
first tuesday take: The saga of the housing credit continues. $8,000 in tax credit may be of help to those who are already poised to break into the housing market during the next six months. The credit will probably have no effect on those who haven’t the resources to scrape up the down payment. The number of potential homebuyers who are influenced by this extension is not likely to exceed the number of current homeowners who are walking away from their properties or being foreclosed upon. So it appears we are really just providing an $8,000 tax credit for shuffling ownership of property from one owner to the next.
Re: “It’s likely home-buying credit will be extended” by The San Francisco Chronicle