Possible Extension of the First Time Homebuyer Tax Credit

There are still many great deals to be found

There are still many great deals to be found

For the last few months, several different organizations and politicians have been lobbying to have the first time homebuyer tax credit extended - and the National Association of Realtors has been at the forefront of this effort.  While we in the industry have been hopeful, we clearly have not wanted to get our "hopes up" or those of our clients.  The last several months we have seen a definite increase in closed sales, but in September, we saw the first decline in new home sales since March.  Industry experts say that this is due to uncertainty about the tax credit - and no matter how you look at it, the credit has indeed stimulated at least the first time homebuyer price range of the market.

Justifications for extending the credit include it's obvious positive impact on the market, and the fact that as of yet, not as many homebuyers have been able to take advantage of the credit as the lawmakers had hoped.  Wednesday, October 28, 2009, senators agreed to extend the credit.  The bill still has yet to be passed - and then it will have to go through the House, although House leaders have expressed support for extension of the credit.

Here is an excerpt from the news article:

"Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to "repeat buyers" who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev. (Note that the federal definition for first-time homebuyers are those that have not owned a home for the past three years.)

The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers."

To read the rest of the article, go here.

I will keep you updated on this incredibly important development as it unfolds - stay tuned!  There is no doubt that the extension of the credit would benefit many buyers who simply could not take advantage of it within the current window.  Here's hoping...