First-Time Homebuyer Credit Will Be Extended…But How?
For months, the real estate industry has eagerly awaited news on whether the first-time homebuyer tax credit (for up to $8,000) would be extended past its original deadline of Nov. 30.
Yesterday, they sort of got an answer.
"We have that. Done," Senator Chris Dodd told reporters. But there was no official word on how long the benefit would last. Or whether second-time, third-time, etc. buyers would now be able to use the credit. Or whether the income restrictions would change. (All this according to Reuters.)
Back in September, when the credit's future was uncertain, buyers rushed to purchase new homes and make sure they used the credit while it was still around.
That month, sales of used ("existing") homes increased 9.4 percent, after a dissapointing and unexpected sales drop off in August, according to economist Patrick Newport of IHS Global Insight. But in his latest report, Newport forewarned that unless the tax credit "is both extended and expanded, sales will take a hit, and house prices, which have stabilized recently, will start falling again."