There are dozens of articles on this site about the Home Buyer Tax Credit. You can see them all here.
For the most recent news about the Home Buyer Tax credit, please see this article (July 2, 2010).
The $8,000 first time home buyer tax credit ($6,500 for existing homeowners) is scheduled to expire April 30 (sales contracts signed by April 30 have until June 30 to close).
I’ve written a LOT about this tax credit over the past year. Depending on who you chose to believe, the tax credit has been wildly successful or a miserable failure in helping the real estate market recover.
Personally, I think it falls somewhere in between those two extremes.
I’m sure some people have bought homes only because of the credit. Let’s face it, eight grand is a decent chunk of change.
But buying a home solely to score $8,000 is a bad idea. Do that, and you’ll likely find that $8K evaporates swiftly. “Incentivizing” people to buy homes is fundamentally a bad decision on the government’s part. Personally I have yet to run across a home buyer that is buying now solely because of the tax credit. I’ve heard other agents though claim it has increased sales. I wonder though, how many of these agents asked the specific question, “Are you buying now only because of the tax credit?” My guess is most people buying now and getting the tax credit would have bought in the near future anyway, and if that is the case, how exactly does this credit stimulate the housing market?
I’d rather see the government step out of trying to influence the real estate market. It will self-correct, albeit not as quickly as most would like.
Now word is starting to trickle out of Washington, D.C. that certain entities (notably the NAR — National Association of Realtors) are lobbying Congress for yet another extension of the home buyer tax credit (see Wall Street Journal, Take Three; Will Congress Extend the Home Buyer Tax Credit?).
From the NAR’s website:
NAR strongly supports the first-time homebuyer credit. NAR also believes it should be extended through 2010.
Senate Finance Committee Chairman has taken a very vocal and strong position that the homebuyer credit will not be extended again and that it will expire on April 30, 2010, as presently scheduled. The transition rule through July 1 will be retained.
My gut feeling is the tax credit will not be extended again. During the debate on the current extension last February, several Congressmen and Senators publicly stated that would be the last extension. Now these are politicians of course, and we all know they can flip-flop on statements and issues. I just called Senator Johnny Isakson’s office and spoke to one of his staffers. Senator Isakson was the Senator who pushed hardest for the original tax credit and the last extension. His staffer Ryan told me there was currently no planned legislation that she was aware of and that Senator Isakson currently had no intention of introducing legislation to extend the credit again.
That’s not to say that some other Senator or Congressman couldn’t step up and try to take this on. The NAR has a lot of pull in D.C. and I suspect (but have not been able to confirm yet) that other Realtor associations, home builders and the like will push the lobbying efforts to extend the credit.
Time will tell I suppose. Prior to the last extension I would have bet big on the extension. Right now, I’d bet that is will not be extended. I certainly could be wrong. That happened once. 😉
Here are result of a completely unscientific poll I took before the last extension:
I’ve opened up a new poll asking if the tax credit should be extended again. I’d appreciate it if you could take this poll and you are of course welcome and encouraged to leave a comment on how you feel about the tax credit being extended again.
In hindsight, I should have added a “no opinion” option on the poll. Let’s face it though, you probably should have an opinion, even if you have zero intention of using the tax credit. Whether you utilize it or not, you’re paying for it”¦