Is the Home Buyer Tax Credit Going to Be Extended Beyond April 2010

By
Real Estate Sales Representative with Weichert Realtors - Shoreline Properties

With the deadline looming for the current home buyer credit that expires in April 2010 (with closing by June 30th 2010), many are wondering if there is any update on a further extension of this popular tax credit.  

Recent housing data suggests the housing market is still struggling. Various data and statistics points to evidence the housing market, at the center of the worst recession since the 1930s, is still struggling to rebound. So the question a number of realtors and the general public are asking is ... will the home buyer credit be extended again? 

There has been positive and negative sentiment for the home buyer credit, however, in addition to allaying the weakness in the housing market, extending the home buyer credit again could be a smart political move in an election year.

Lawmakers, now more than ever, are looking for any successful mortgage and/or housing-related program that they can stand behind. Deficit issues and the concept of whether we're rewarding those who might have bought anyway will take a back seat. Keeping home sales going promotes home price stability, and that makes for less-grumpy voters as election time rolls around.

As of yet, there are few official rumblings about further extending the home buyer credit for new and existing home buyers. However, if the housing market and political climate continues to deteriorate I would not be surprised to see the credit extended again (albeit with slightly different conditions) to at least the end of the year.

I'll keep monitoring the status of this credit to see if an extension is proposed in any new bills and continue to post any new updates.

What are your thoughts on the following:

•·  Has the homebuyer credit helped increase activity in your market? 

•·  Has it motivated sellers that were on the fence to purchase? 

•·  Should it be extended through the end of the year? 

•·  Does it lose its motivating impact each time it is extended ... as in yes ... this time we "really mean it will end" so buy now?

Comments (7)

Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

It should NOT be extended. We don't have any more money to hand out to people. Deadlines are given for a reason, and it's silly to keep extending deadlines when we can't afford it!

Apr 16, 2010 02:25 AM
Stephanie Hall
Keller Williams Realty - Madison, MS

I believe it has helped motivate buyers. We have worked with so many buyers that have bought recently due to the tax credit.

Apr 16, 2010 02:29 AM
Jeana Cowie
RE/MAX Real Estate Limited - Paramus, NJ
Broker Associate, ABR, CRS, GRI, SRES

Diane,

The tax credits have definitely helped buyers & sellers in my area of Bergen County, NJ. It will be interesting to see what happens when it expires.  I think serious motivated buiyers will still buy. But prices will probably need to come down more especially when interest rates increase.

Apr 16, 2010 02:32 AM
Dinah Stallworth-Lewis
Priority Real Estate LLC - 318.332.8281 - Natchitoches, LA
NATCHITOCHES, LA HOMES FOR SALE

I agree Donna, the tax credit is a band-aid for a much bigger problem with our economy.  I think the lenders we bailed out a while back should do something to help home buyers and home owners on the brink of foreclosure or beyond it.  These people need help.  So, Diane ... I don't think the tax credit for first time buyers has had much of an impact.  The Obama administration is trying and I applaud their efforts.  However, it is going to take some major brain power to figure out good solutions to these problems. 

Apr 16, 2010 02:40 AM
Dorothy Tanno
ReMax Realty 9 - Jackson, NJ

I agree on all of your points however I will be very surprised if it is extended. 

Apr 16, 2010 02:45 AM
Katherine Fornale
REMAX REALTY 9 - Howell, NJ
SFR, GRI

I don't know if it will be extended, but I do know that it has helped other small businesses such as movers, carpet companies, plumbers, electircians, lawyers, etc.  I've also been told that for every home sold, it allows three to five other homes being sold (trickle up/down) which in turn stimulates the small businesses even further.  As far as I can see, it has been a good thing.

Apr 16, 2010 03:04 AM
Diane Zorich
Weichert Realtors - Shoreline Properties - Branford, CT

Thank you all for your responses.  The funny thing is I agree with all of you. 

The Home Buyer's Tax Credit if far from a black & white issue ... it has positive and negative aspects to it ... as reflected in your comments above.

The credit has positively impacted activity in my market area in Ct, and therefore personally benefited me, my clients and all the peripheral business that benefit from the sale of homes.

However, I have mixed feelings about all stimulus plans implemented by the government, this one being no different.  Normally we are just kicking the "problem" can down the road.  And, quite frankly, the longer a problem is delayed in all areas of our economy, the worse the eventual end result will be.

I'll be curious to see what happens to activity and market value when the tax credit does expire.  I'll be curious to see if lawmakers will refrain from additional manipulation of the real estate market.

And, at the end of the day, I would not be surprised to see the tax credit expire or extended.

 

Apr 16, 2010 04:56 AM