With the November 30th deadline right around the corner, Congress has endorsed the idea of prolong the tax credit for an additional 6 months. The White House economic team is evaluating the credit's impact on the current housing market before suggesting an extension to President Obama.
While the tax credit is no doubt helping stabilize the housing market, there are conflicting views about the practicality and cost of an extension. Some lawmakers are balking at the cost, which may hit an estimated $15 billion - more than double the amount projected in February's economic stimulus bill. Other government officials would like to see the money that would be put towards an extension, instead be put towards unemployment insurance, food stamps and assistance for local and state governments.
Word from Capitol Hill is that if the government pulls out of this too soon, house prices will once again fall to all-time lows and the number of homes for sale will increase. With about 3 of 10 home purchases being first-time home buyers, the tax credit seems to be doing a positive number on our economy. The chances of Congress approving the extension is currently around 60%.
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