There's so much hype right now with the tax credit deadline nearing. I'm curious if (A) you think the first time home buyer tax credit should be extended, and (B), Why? Also, does anybody know when we will find out if there is going to be an extension?
Darla - A past president of the Long Island Board of Realtors where I am a member went to Congress today and appealed for an extension. There are talks of 6 months extension. Whether it will go or not, we do not know yet.
If you watched "This Week with George Stephanopolous" you would have seen Senators Schumer and Cornyn in rare agreement as they discussed the extension of the tax credit. They both agreed that some sort of extension was necessary. Senator Isakson's bill would extend the tax credit for six months to a year and expand it to include all homebuyers. Additionally it would increase the amount of the credit to $15,000. If the bill does indeed get out of the Senate it should receive support in the house from Barney Frank given his past support for Fannie Mae and Freddie Mac.
That being said, I think the tax credit will be disastrous for our economy. Home prices need to settle down to their natural level for the economy to achieve sustainable growth. The tax credit does nothing but distort the market.
Debra - Thank you for the excellent information. The other issue I have with this is now we have potential first time homebuyers sitting on the fence because of the potential increase in the tax credit, which may or may not happen. At the end of the day, they may miss the opportunity entirely.
Darla: I'm sure it will be extended, but I'm not sure what the long term good will be. Seems that the more it gets extended, the more buyers will need to be incentivized to buy. It's like a interest tax deduction is not enough anymore.
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