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House on Tax RefundNAR is Asking for an Extension on the Home Buyer Tax Credit 

As we all know the home buyer tax credit expired on April 30 for purchase and sale agreements with a closing deadline of June 30.  Now, the National Association of Realtors is asking Congress for an extension of that window date. 

One of their arguments is that so many of the properties under agreement are foreclosures or short sales and these types of transactions need more time to close.  Short sales are not, well - short.  They actually take longer to close than the average home buying transaction.  

Lawrence Yun, NAR's chief economist said, "There could be a sizable number of home buyers who responded to tax credit incentives, but may encounter problems." 

Will NAR be effective in moving the government on this issue?  

One way they could do this is would be to pass an extension to the deadline already in place.  They would have to do it quickly which would not be an easy task with so much else on the agenda these days. 

Everyone is pulling for the housing market to improve.  Realtors®, current homeowners as well as home buyers.  But, is the way to do it with continual extensions? 

Congressman Ron Paul recently proposed the "Homeowner Tax Credit Extension and Expansion Act," legislation that would permanently extend the first-time home buyer tax credit. It would also make credit available to those whose homes have been destroyed by a natural disaster. 

His argument is that renewing this program would help first-time buyers purchase a home with their own money rather than to rely on government-backed programs.  

But, isn't this a government funded program?  And, I never quite grasp the logic in making these subsidies and incentives available only to first-time buyers.  The move-up buyer actually injects more money back into the market since they must sell their current home and purchase something more expensive. 

The questions remain - should these programs be extended and if so, should they only be limited to first-timers?

Copyright 2010 "NAR is Asking for an Extension on the Home Buyer Tax Credit "

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14 Comments on NAR is Asking for an Extension on the Home Buyer Tax Credit

JUN
05
2010
149,483 Points

That would be good Claudette but I think it will be a tough sell right now...
11:23pm • #1
235,304 Points 6 Featured Posts Called Shot Master

Caludette: Good questions without clear answers. Eventually the market is going to have to work with private money.
11:24pm • #2
649,189 Points 29 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Claudette, I'm not thrilled about them extending this.  I would like to see us heal naturally. 
11:24pm • #3
231,293 Points 8 Featured Posts Outside Blog Called Shot Master

Hmmm... I wish the NAR lobbying arm would poll the membership before moving ahead with spending our valuable membership dollars on more of the same.

Given the yet unknown impact on how spillonomics will play out in local real estate markets in the coast communities along the Gulf; I would rather see NAR moving their focus and some of our member dollars out of lobbying to make a difference for our members there.
11:37pm • #4

We have heard it before.  Without JOBS RECOVERY the economic recovery will be weak and slow.  I do believe the infusion of the tax credit dollars did help in the initial recovery of the housing market.  The last many months have showed significant increase in year over increases. 

The latest indications though are, with the end of the tax credit, we are seeing a 40% DECREASE in the new home mortgage applications.  To me that is a clear indicator that we need the tax credit incentives in order to keep the home sales engine fueled.  Once we have significant jobs growth/creation we can put away the tax incentives and begin to grow organically again. 

I think NAR is making good use of our contribution dollars in this instance.

 

 

 

 
11:46pm • #5
JUN
06
2010
513,844 Points 6 Featured Posts Outside Blog Called Shot Master

It would be nice to see an extension but I doubt it will happen.
12:05am • #6
280,697 Points 83 Featured Posts Called Shot Master

I usually agree with Dr. Paul, but it is a government program when $8,000 is on the line
12:09am • #7
395,027 Points 35 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp

Kathy:

It is a hurdle but NAR is trying to get it extended past the June 30 deadline.

Matt:

Indeed, but when the "eventually" is will be another question.

Marchel:

I think we would all prefer to see that happen.

Emily:

Do you mean they should actually ask us first?  That is an interesting idea.

Devan:

The latest jobs report did show that we are not out of the woods yet, in fact, far from it. And, of course there has been a correlation in mortgage applications with the end of the tax credit.

Dan:

We will have to watch this one.

Scott:

I can't say that I quiet follow his logic on this one. How would extending a government program be allowing buyers to use their own money?

 
8:14am • #8
2 Featured Posts

Interesting post Claudette. I look forward to the day when that type of assistance is no longer needed. However, I hadn't thought about the "short sale" situation & all those delays. That could be a real problem for some folks.
11:42am • #9
395,027 Points 35 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp

Dan:

You and I both look forward to the day.  Short sales do pose a special challenge to try to meet that June 30 deadline.  I think that will probably be their strongest argument for an extension.
12:15pm • #10
1,140,638 Points 76 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Claudette:   Isn't this way of thinking about getting more first time buyers in the market what got us in trouble to begin with?  Only now, underwriting guidelines don't allow for 100% financing, but require downpayments....but wait.....the government's tax credit could be used for that.  Sounds like we are perpetuating the problem.  If there is no hard earned money put into the transaction (aka--skin in the game) what is to keep home owners from walking away and keeping us in foreclosure/short sale hell?
12:29pm • #11
395,027 Points 35 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp

Chris Ann:

Right you are about that logic and you have seen much of the evidence of what this can cause since you specialize in short sales.  This is why I question Ron Paul's sentiment that extending this tax credit for first-time buyers would help them to buy a home without government-backed subsidies.  Isn't this program a government-backed subsidy? It is really a vicious circle without an end.

 
1:16pm • #12
519,126 Points 43 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

I am with Emily on this one, I would like to see the market heal and recover on it's own. I don't belive the tax credit would be a good idea. The real problem we are facing is the banks making lending next to impossible. All we have to do is take a look at our neighbors to the north. Canada's market is doing well, all without govenment interference.

I also agree with Emily about the NAR I wish they would poll those that fund them first. I am not happy at all with the money that I am FORCED to give them. They do not represent me and use my own money to do so. Membership in the NAR should be optional for all Realtors
2:16pm • #13
395,027 Points 35 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp

Gerry:

Membership in NAR may be more optional than you think. I visited this subject in a previous post that I wrote where most Realtors felt that they had to belong in order to use their Multiple Listing Service.  I checked on this and my own MLS (MLSPIN) does not require you to belong to NAR. I was actually quite surprised at that.

I think most of us pay our annual dues to NAR for some of the protection it gives with regard to Code of Ethics. But, if you are really unhappy with them, you may want to check with your local multiple listing service to see whether or not it is mandatory for you to be a NAR member.

 
5:46pm • #14

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Claudette Millette - Metrowest Mass Buyer Broker

Ashland, MA

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