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April 14th, 2010

Second Extension of Homebuyer Tax Credit Seems Bleak

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What’s the latest on the homebuyer tax credit? According to a recent Bloomberg article, certain lawmakers are saying that a second extension of the homebuyer tax credit is not on the table:

“That’s not on the table,” Senate Finance Committee Chairman Max Baucus, the chamber’s top tax-writer, said today in Washington.

“I think that’s pretty much it,” said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat.

Nor is the tax break’s chief Republican sponsor demanding an extension. “I said when we passed it before that I would not come back to the well and I’m not going to,” said Senator Johnny Isakson of Georgia.

While there’s certainly substantial opposition out there against another extension, there’s a large throng of supporters who are depending on it. The poll on this blog that asked readers if the homebuyer tax credit should be extended again has received over 1,000 votes; 87% of voters were in favor of a second extension, 12% voted against it and 1% were indifferent. The National Association of Homebuilders’ (NAHB) website (FederalHousingTaxCredit.com) that’s dedicated to the homebuyer tax credit received around three million visitors in the first three months of this year alone.

But as we’ve been saying all along, the tax credit should merely be an incentive for homebuying, not your sole reason for it. If you’re a qualified borrower, don’t let the pending expiration of the tax credit sway you from your decision to buy. NAHB Chairman Bob Jones agrees:

“Home buyers need to remember, that even though the tax credit is about to expire, conditions remain ideal to buy a home,” said Jones. “There are plenty of existing homes on the market, interest rates are at near-record lows, and prices are very competitive.”

Whether or not your goal is to take advantage of the homebuyer tax credit before the April 30 deadline, you can still begin your search for the home you need right now.”

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18 Responses to “Second Extension of Homebuyer Tax Credit Seems Bleak”

  1. SteelResearch (Josh Spoores) Says: April 14th, 2010 at 4:40 pm

    RT @hshassociates: Second Extension of Homebuyer Tax Credit Seems Bleak http://bit.ly/c7qObz Certain lawmakers are saying a 2nd extension is not on the table

  2. Gail Says: April 20th, 2010 at 1:30 pm

    I read here – http://www.savingtoinvest.com/2009/02/15000-first-home-buyer-tax-credit-in.html – here that congress and realtors group are looking at this issue. Do you think anything will be decided soon? I am in the market for a house and would like to know if I can delay the purchase. Very little info available.

  3. Tim Manni Says: April 20th, 2010 at 2:44 pm

    Hey Gail,

    Well, the deadline is April 30 (all contracts must be signed by then and closed by June 30). I’ve read that the realtors and the home builders haven’t officially advocated for another extension. We’ll have to wait until the home sales reports to come out to really get a sense if the pending expiration will bringing the amount of people into the market that they hoped for.

    We’ll keep you posted, be sure to check back in with us. Thanks for commenting,
    Tim

  4. Liz Says: April 27th, 2010 at 6:38 pm

    Hello,
    If we are lucky to get a 2nd extension do you think they’ll wait till April 30th to anounce it?
    Thanks

  5. Tim Manni Says: April 28th, 2010 at 9:54 am

    Liz,

    If, and it seems as though it’s becoming a bigger if, it would likely come after April 30. I’ll keep you posted.

    Thanks for commenting,
    Tim

  6. T Says: April 29th, 2010 at 10:39 am

    They do need to extend it until the end of 2010. Most buyers don’t start looking until spring anyway and most people do not list their properties until spring. It just makes more sense to let it expire at the end of the year anyways.

  7. Tim Manni Says: April 29th, 2010 at 11:06 am

    T,

    Thanks for your comment, we’ll have to wait and see…

    Thanks,
    Tim

  8. Cindy Says: April 29th, 2010 at 12:34 pm

    We are in negotiations with a contract. It doesn’t appear that we will be able to get the contract signed on/by April 30th. But the closing date, (if we can agree on some things in the contract) is already set for June 25th. I looked it up and it said on wikipedia that the home purchase contract is not reported to the government. It only gets reported to the government if it closes and money is exchanged. So, will I really miss out of the $6500 tax credit just because the contract wasn’t signed by April 30th? Is that something that could raise a red flag?

  9. Liz Says: April 29th, 2010 at 9:08 pm

    Hello Tim:
    Have you noticed that the news has not been giving any news about the Tax extension experation on April 30th, I would have expected for them to be giving a countdown. I heard that the general public were mad with the Government when they anounced the first extension 2 weeks before it ended back in November because people started backing out of their contracts to give them more time to look for a better deal. For this reason i’m thinking and praying that they are waitting till tomorrow to make a 2nd extension announcement. I need a little more time please!!!!!!!

  10. Ms. Troy Knox Says: April 29th, 2010 at 11:48 pm

    I would like it very much if the tax credit would be extended.
    I am in the market to purchas a home for my son and myself.

  11. Joe Says: May 3rd, 2010 at 9:48 am

    So the big deadline is over for the tax credit and in the 12th hour the home I wanted came on the market which was a forclosure. I called for over 6 weeks to get a price on this home and could not get the bank to get a price on the home since there were a large amount of leins against the property. By the time the seller disclosure which had nothing on it got over to my realtor it was too late for the bankers who had left for the day to be able to accept any offer. I have seen articles that the tax credit should be an incentive but not a final decision maker on buying a home. Home buyers tax credit to me was more than an incentive it was a way for me to buy my first home. I have the money for closing and for a conventional home loan. I could go FHA put less down and have a higher payment this way I could afford to do the changes that need made (new floor in kitchen as the old one was ripped up) and purchase all new appliance since there are none. Originally I would have purchased the home NON-FHA and purhcased things I needed on my credit card (low intrest rate) and paid the bill off as soon as I recieved the tax credit. Now instead of stimulating the economy I will continue to rent and not own a home. My hope is that the housing market falls as well as the purchasing of new appliences and other home neccessaties and that this congress, senate, and administration realizes how bad of a decision they have made in not extending the tax credit.

  12. Tim Manni Says: May 3rd, 2010 at 1:11 pm

    Joe,

    “My hope is that the housing market falls”: why would you want that to happen? Mortgage rates are low, prices are cheap, it’s still a great time to buy. So, are you not going towards an FHA-insured loan? Have you decided to save up for a larger DP and go non-FHA?

    Thanks,
    Tim

  13. Dileep Says: May 3rd, 2010 at 3:19 pm

    I would really go and buy a home if it gets extended. If not, I am not sure if I can buy it. Though this offer was there more than a year, situation does not favour me to buy that
    time. I will wait and see if this gets extended. Looks like there are mild chances.

  14. Tim Manni Says: May 3rd, 2010 at 3:48 pm

    Dileep,

    I’m sure if we’re going to hear about another extension extension it will happen before June 30.

    Thanks for commenting,
    Tim

  15. Tammi Says: May 4th, 2010 at 4:58 pm

    I wish they would extend the tax credit, as it has helped a lot of new homebuyers, and has gotten the housing market on the move. The economy is starting to rebound, and a large part of that is due to the number of people buying homes with this particular incentive.

  16. Tim Manni Says: May 5th, 2010 at 4:11 pm

    Hey Tammi,

    Thanks for commenting. How well do you think the market can do on its own, without the credit?

    Thanks for your comment,
    Tim

  17. Jp Says: June 9th, 2010 at 2:48 pm

    I am a current home owner. I found a home that i want to buy, and have already been pre approved, and started talking to my Realtor about putting my home up for sale. But now, hoping that the tax credit gets extended, i think im going to hold off on purchasing the new home. Is it bad that the hopes of a tax credit is keeping me from buying a new home? Is anyone else putting off home buying because of this? Thanks a lot, Jp

  18. Tim Manni Says: June 10th, 2010 at 8:17 am

    JP,

    If it was me, I wouldn’t hold off. Rates are sooo low right now that taking advantage of these low rates will save you so much more in the long run. Wait, and rates could rise, perhaps by a lot depending on how long you hold off.

    I don’t think anyone has heard anything about another extension, and I don’t think anyone believes that the homebuyer tax credit will be extended again.

    You may want to read this post:

    http://blog.hsh.com/index.php/2010/04/dont-let-the-homebuyer-tax-credit-force-your-homebuyer-decision/

    That’s just my opinion. What does everyone else think?

    Thanks for commenting,
    Tim

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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