Should Congress Extend the Tax Credit for First-time Home Buyers?

As you all may know, Congress passed the American Recovery and Reinvestment Act of 2009 that authorizes qualified first-time home buyers a tax credit of up to $8,000 provided they purchase their residence between January 1, 2009 and November 30, 2009.recovery.gov logo

This was a move that was welcomed by would-be homeowners as well as members of the housing industry. Would-be homeowners are now more inclined to purchase their homes because they know that they’ll be getting a savings of $8,000 in the short term. And what’s great about this tax credit is that, unlike the 2008 tax credit, this doesn’t need to be repaid. So, it’s really like getting $8,000 in windfall money. You also have plenty of choices as to which type of home you would like to purchase – whether you want a bungalow, a condominium, a mobile home or even a houseboat. All of these are eligible for purchase.

Now, this 2009 tax credit offer will expire November 30, 2009. Speculations are soaring whether Congress will extend this offer or not. Some expert’s say that it shouldn’t be extended considering that the State’s debts are really piling up and they need all the revenue that they can get. On the other hand, some economists are saying that extending this $8,000 tax credit is a boom to the real estate industry because it will keep the cycle moving as more and more people are taking advantage of being able to buy their homes despite the crisis.

Being able to buy a home during this down cycle in the real estate market can really help the economy. It helps move inventory that is not moving and gets people in to owning a home instead of paying rent. In the San Diego Real Estate market, it has allowed many buyers to purchase homes they could not afford to buy 3-4 years ago. If you think that this should be extended please continue to talk about it. Leave a comment and let us know why it should be extended. If you think that the first-time home buyer’s tax credit has gone on long enough and you want to put it on the shelf, please leave a comment with your reason.

15 thoughts on “Should Congress Extend the Tax Credit for First-time Home Buyers?”

  1. Rebecca @ Rancho Bernardo Skin Care

    It would be nice if this continued, I have several friends that have already taken advantage of the tax credit and I know that a few others are currently working on finding a home. The tax credit may expire before they can get someone to accept an offer from them. This seems to be a real issue, there are not enough homes that are available to purchase.

  2. Extending it would really help many. Thanks for sharing this. We could always hope for a better tomorrow. By the way, I know a great Kentucky home that might interest you too. Thanks.

  3. If they did extend it I will help out the economy a lot. I just hope first time home owners are still buying within their means even with the “Free” $8,000, and not just buying $8,000 more house.

  4. I can definitely attest to the value of the program. I have many clients trying to buy and close before December 1st. However I don’t think our government actually has any more money to give out. We already have tripled the deficit and it’s going to catch up to us sometime.

  5. I think it should end with no announcement of starting it again and then announce starting it a month or so later. This would keep the sense of urgency and make sales brisk this fall. Then announcing it again might get more people who missed out jumping into the market. With so many homes being sold now being to first-timers, sales may hit the skids if the program just ends.

  6. From a selfish standpoint I would want to continue the program, not only from an agents standpoint but a 1st time home buyers standpoint but here’s the bottom line. When your in a hole stop digging! For some reason the American people/Government just can’t get their head wrapped around this concept. There is a point when dept is toxic…even when the powers that be are trying to justify good dept and bad dept. At this point its all bad. LET THE MARKET WORK ON IT OWN.

  7. My vote is for extending, and not expanding, and only to get us through the Winter — I am thinking till next March would be nice. There is so much uncertainty about what interest rates are going to be this December I think we need it.

    I am not a fan of expanding it or extending too long because I am already hearing enough stories about fraudulent claims being made, and payed out. Almost as many as loan mods being granted and then sellers turning around and selling for a profit after their 2nd was forgiven. Which I think I am going to be reading something about here on the next post 😉
    .-= Jay Myers´s last blog ..How some agents waste your time and theirs with Open Houses =-.

  8. I think extending it would be great. There are many of my friends still looking and wanting to close before the deadline, but can’t seem to find the right house. One friend just picked a house and it really wasn’t he wanted he feared he wouldn’t find what he wanted before the deadline. Plus builders are rushing building the homes to have ready in time for closing date. Everyone has/will benefit from the extending the tax credit. Call/email your congressman and senate. HELP PUSH TO EXTEND THE TAX CREDIT!!!!

  9. I think extending it would be great. There are many people who are still looking and wanting to close before the deadline, but can’t seem to find the right house. People don’t want to just picked a house and it really isn’t what they want, even with FHA and Conventional Loan approvals for Condos, in fear they wouldn’t find what he wanted before the deadline. Everyone has/will benefit from extending the tax credit. Even if extended until the end of April 2010.

  10. I’m sure there will still be some investors who will try and finagle the applications to make it look like they are buying a first home. But with that being said I think this is a great program. I wish this program was available when I was doing mortgages but the economy flushed me out I couldn’t afford to stay in that market.

  11. Ryan "Tiny" [email protected] Indiana Real Estate Agent

    I’m really happy that they have extended this tax credit. It allows a few of my buyers to be in a position to receive the credit now!
    .-= Ryan “Tiny” [email protected] Indiana Real Estate Agent´s last blog ..2009-2010 – First Time Home Buyer Tax Credit =-.

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