First Time Buyers May See $8,000 Federal Tax Credit Extended

Washington is seriously thinking about extending the current $8,000 tax credit for first-time buyers beyond its November 30th expiration date and expanding it to a wider circle of principal home buyers. There are growing concerns in the Obama Administration and Congress over worrisome prospects for reducing the nation’s lengthening unemployment lines and further strengthening the economy as it moves tentatively toward recovery.

“The tax credit has clearly had a positive effect on housing demand and in the job market,” said NAHB Chairman Joe Robson. “We stand ready to work with President Obama and the Congress to extend and enhance the tax credit to help reduce foreclosures and excess housing inventories, to stabilize home values and to push housing and the economy on a glide path to recovery.”

Following some encouraging remarks from White House Press Secretary Robert Gibbs, NAHB on October 6th said that home builders were ready to work with the White House and Congress to extend the credit and help bolster the real estate and construction industry’s economy.  It would undoubtedly make the National Association of Realtors happy as they have campaigned most of the last 6 months for the extension.

NAHB estimates conservatively that the current tax credit has been responsible for some 200,000 additional home sales since early this year, resulting in a net increase of 187,000 jobs. Extending the tax incentive through November 30, 2010 and making it available to all income-qualified purchasers of a principal residence would result in an additional 383,000 home sales and generate 347,000 new jobs in the coming year, according to NAHB economists. At an October 5 press briefing, Gibbs said that “there has been quite a bit of success” with the home buyer tax credit, and he added that the President is considering extending it to strengthen the economy and create jobs.

“Prompt congressional action on the tax credit is a crucial first step to shoring up the fragile housing recovery and leading the economy to higher ground,” said Robson.  “Housing is the best opportunity to put this country back to work.”

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