With the deadline looming for the home buyer credit many readers have asked if there is any update on a further extension of this popular tax credit. Recent housing data suggests that the housing market is still struggling with pending home sales dropping nearly 8 percent recently. The drop in pending (contract) home sales and unexpected declines in purchases of new and existing homes last month, adds to evidence the housing market, at the center of the worst recession since the 1930s, is still struggling to rebound. So the question a number of realtors, housing industry members and would be home buyers are asking is that will the home buyer credit be extended again past summer and possibly into 2011?
Undoubtedly there is significant negative sentiment towards the home buyer credit, particularly from those home buyers who could not take advantage of previous versions with lower income limits; and from most conservative groups and fiscally focused politicians who want the home buyer tax credit to expire as planned. However, in addition to allaying the weakness in the housing market, extending the home buyer credit again could be a smart political move in an election year. Lawmakers, now more than ever, are looking for any successful mortgage and/or housing-related program that they can stand behind. Besides the Fed’s mortgage-backed securities (MBS) purchase program, the homebuyer tax credit has been touted by some as an extraordinary success. Such, “success” can be claimed, providing the necessary political cover to advocate extending the program, especially since the simple fact is that it if doesn’t work — that is, if it’s not being utilized — that it costs nothing. Deficit issues and the concept of whether we’re rewarding those who might have bought anyway will take a back seat. Keeping home sales going promotes home price stability, and that makes for less-grumpy voters as election time rolls around.
As of yet, there are only a few official rumblings about further extending the home buyer credit for new and existing home buyers. However, if the housing market and political climate continues to deteriorate I would not be surprised to see the credit extended again (albeit with slightly different conditions) to at least the end of the year.
One thing is for sure, over the next couple of months we are going to hear a great deal about the first time home buyer tax credit extension. It will be very interesting to see what Washington has to say about the current state of the housing market and the possibility of an extension to this tax credit.I will keep monitoring the status of this credit to see if an extension is proposed in any new bills and encourage you to subscribe (free) to get the latest updates on the extension of this credit.
Related posts:
- Possible September 2010 Extension to Home Buyer Credit as Builders and Home Owners Struggle to Complete Home Transactions by June 30 2010 Tax Credit Deadline
- Claiming the First Time Home Buyer Credit in 2009 Tax Returns – Forms and Documentation Requirements
- Economic Stimulus Tax Information for Members of the U.S. Armed Forces – Home Buyer Credit and Recovery Payments
{ 4 comments… read them below or add one }
notify me if the buyers credit will be extended till next year 2011.
I hope Obama extends 8000 credit for firts home buyers. If it does extend till 2011 please late me know.
I hope and pray the first time home buyer is extended!!!!!!!!!!!!!!
My husband and I are in escrow as I speak. I was hoping that we would be able to apply for the first time homebuyers credit. Please notify me with any updates. The extra money would help a lot. Thanks in advance.