What is the reason that real estate tax credits are limited to first time homebuyers? It doesn't make any sense to me.

Richard, All I know is that I have ready willing and able buyers ready to buy but can't because we cannot sell their back up house. One seller even said to me if he had been eligible for the credit he would be more willing to take a "hit" on his current home.

because they are democrats and heaven forbid any body get relief that doesn't fit their poor and dienfranchised motto.

Point well taken...I agree with what your blog says.  There should be a credit for buyers, first time or otherwise.

Patricia Aulson/Portsmouth NH Real Estate

I'm sure the reason is that the move up the food chain in a recession normally starts at the bottom, with or without the tax credits. When a first time buyer buys a home, that frees up the next in the line to buy without a tax credit.

If we want to spend as little as possible, this is the way to do it.

As Norma stated before me the first time home buyer drives the market and uncle sugar is trying to allow the market to run it's normal course. Hmmmmm........

My opinion is they should run it across the board to help the market shake out quicker and return to normal as fast as possible.

I think tax credits for first time buyers is the same as those credit cards that offer you a low interest rate for the first few months before they raise them to 19 percent or whatever. The point is, they want to get the consumer hooked, after that it's all fresh meat.

Cynical ... who me?

Very good point Richard - seems so simple !

.... ever think of running for government ??? LOL

Amen Richard!  I know SO many people (including myself) that when things started to turn, they realized they would have a tough time keeping up with their current mortgage, sold their home and rented for short term.  We did buy down after a year but it would have been nice to get something out of being responsible.  People buying homes gets things moving..that's for sure so let's give them the incentive!

All for one and one for all...well...at least for this topic. I agree that the government is losing some of it's steam in a bypass valve by only limiting these programs to first time buyers when many previous homeowners are FULLY capable of doing their part to stimulate the economy. Why not let the floodgates open temporarily to allow some of that stagnant water to leach!!

Richard, I totally agree.  At least it is also helping non-first time buyers sell.  And it's helping Realtors.  If you offer 8 grand to everyone, that would be a huge amount of government spending when there has already been a huge amount as it is!!!

Interesting thought. I guess the thought process starts with the first time buyers beginning the chain that follows up the price ranges and helps everyone.

Hi Richard,

Yes...a broad based credit would certainly get things moving more quickly...and I would love to see it. But under the current credit scrutiny, I don't agree that first time buyers create a greater risk of default. And it's well documented that the first time buyer starts the dominoes falling that facilitate other transactions. So while the government didn't get it completely right, I still appreciate the effort.

Now if they could only grandfather those folks who bought last year. Repaying the $7500 really hurts in light of the current rules...

What heppens when the tax credit expires?  Do homes across the board drop by $8,000?  Frankly, I don't think it is a good idea to expand the tax credits. 

Hi Richard,

my!, you certainly have made alot of people think about this one! I agree, the credit should go to everyone.

Richard, glad to see you are back on your game and out of your funk! This is exactly what this economy needs along with a loosening of the credit. People with 750 credit scores shouldn't be held up by the banks internal bickering.

Richard,

Like Christina I am going to also defer from the general comments.   The American Recovery and Reinvestment Act of 2009 applies to homeowners who have not owned a home for three years.  The tax credit is based on 10% of the purchase price up to $8,000.  Additionally, the tax credit is determined by their income, so they may receive the money as a refund when they file their tax returns.  This will also assist in stimulating the economy as people receive their tax refund checks.    This money does not have to be repaid to the government as did the previous tax credit initiative. 

I have been writing about this concept for months.  I agree that we need to provide an incentive to all buyers, but more specifically for people to invest in real estate.  We need new demand into the market, not just move up buyers.

As we are seeing, not surprisingly, first time home buyers have not been responding to the $8,000 tax credit.  Mortgage purchase applications are still very week.  I think a lot of people have overestimated the ability of the first time home buyer to get a loan in this market as well as their motivation to do so when property values are falling 15% and 650,000 jobs are being shed every month.

I think that would have been great.  There are many other incentives for first time home buyers but we also need so move-up buyers to get some of the more expensive stuff sold.  The fact that the income requirement is so low doesn't make sense to me either.

Here is my 2cents-

   The government folk putting this so called stimulus togther know NADA about business cycles & business in general . It's ovbvious that there are not many with Econ 101 under their belt- They do have an agenda for sure - Stimulating real estate sales or any other private business is nowhere to be found in the "Stimulus" plan- Shovel ready jobs are on the way though- as long as you are in a Union!! -- Line up comrades  !