Where are we going with this Tax Credit?

There is a lot of talk about whether THE Tax Credit will be extended or even expanded these days. I wrote a post that explained the state of affairs a few days ago but since then I've heard everything imaginable on the topic, so it's time for an update.

Again, let's start with the facts. We still have a bunch bills although a new one was introduced in the Senate (see text here) and is beginning its quest to become law. Essentially little else has happened on the forefront of the Tax Credit battle.

A blog just a few days ago by Joy Goushaw , Will the $8,000 First Time Home Buyer Tax Credit Be Extended?   Links an article that argues the credit will be extended based on an interview with Senate Majority Leader Reid, a powerful, influential man; but a lone individual nonetheless.  He says we "will be extending that" referring to the $8000 Tax Credit, but makes no specific promises. Of course he can't make any specific promises, in the end he is just one vote.

So those are the facts, as they stand at this time. Now let's talk opinion...

First off I want to make clear, I'm no D.C. insider or Lobbyist (although I used to play the latter on TV- if you want a synopsis of that just email or call me) but I am very much starting to agree with Senator Reid. I do believe (this is MY opinion folks, that's all) the Tax Credit will be extended and that there may be enough support to make it applicable to ALL primary purchases. So what the hell does that mean?

It means if you are a first time homebuyer (FTHB), instead of just competing against all the other FTHB that have the incentive to buy now you will be placing bids against everybody that's looking to buy the best deals available. What do you think happens when a limited supply is met with increased demand?

With that said, and the reasonable certainty that the tax credit would not be increased, for what reason wouldn't a first time buyer that can qualify now choose not to buy? Beats the heck out of me...

Gerry Suarez, Jr.

Your FHA Loan Pro!