Housing industry looking for more than just extension of home buyer tax credit

Real Estate Agent with Keller Williams Fox Valley Realty

The National Association of Realtors, the Mortgage Bankers Association, and the National Association of Home Builders wrote a letter to some of the nations top brass this week in efforts to not only extend the $8000 first time buyer tax credit 12 months, but to expand it.  In a letter to Secretary of Treasury Geithner, HUD Secretary Donovan, and National Economic Chair Council Summers, housings most powerful urged Obama's administration members to expand the program to include all home buyers, not just first time buyers currently eligible for the tax credit.  They also urged the amount of the credit be increased, and be made available for closing. 

Among the stats listed in the letter to the Secretaries, NAR estimated that the credit created an additional 355,000 home purchases in 2008.  How much of an impact is that?  It equates to nearly 7% of the seasonally adjusted rate of sales for August 2009, 5.1 million homes (NAR).  Nothing to laugh at!

 However, it's possible the letter should also have been addressed to Charlie Rangel, chairman of the House Ways and Means Committee.  According to Kenneth R Harney, managing director of the National Real Estate Development Center in Washington D.C., no tax legislation stands a chance without Rangel's stamp of approval.  Rangel has given the thumbs up to an extension of the tax credit as it stands now, but he does not believe that the credit should be extended to buyers other than 1st timers. 

Ultimately, the first time home buyer level is where the credit will do the most good.  Is anyone who is a current home owner really incentivised by $8,000 in a tax credit?  Or even a $15,000 credit (a number being pushed hard by the housing industry)?  Most sellers will need more help than that to take a loss on their current home, even with the dollars gained by purchasing "up".  Let's hope that rumors are correct,and the first time buyers will have another year to become owners with $8,000 back from Uncle Sam.