Unlike the ‘Cash For Clunkers’ program that only lasted for a few months and found it’s way to Clunker heaven, the Home Buyer Tax-Credit Extension looks to be extended. The $8,000 credit for first time home buyers, was set to end December 1,2009, but Congress is looking to possibly extend the terms to possibly another year.
Why extend? Considering most mortgages are taking anywhere from 45 – 60 days to close, with that length of time to close the number of new buyers will start to taper off by October. With an already weak housing market, any stoppage to this program could prevent the economy from rebounding as it has done in the past few months.
What may change? The National Association of Realtors and Senator John Isakson would like to extend the length to the end of 2010, almost double the tax credit to $15,000 and allow anyone who qualifies to buy. Another change would be the stipulation for the home buyer to stay in their new home for a minimum of two years, not the three years of the current program.
In honesty, why change something that seems to be working? Housing prices need to stabilize, you throw in an extra $7,000 to the credit you will have two problems America will face. One, the dumping of current property to buy a new property leading to just replacing on house off the market for a new house to be placed on the market. Two, increasing a tax credit will normally have a negative effect of increased taxes somewhere else. And I for one, really do not want to know where that somewhere else is.