Yesterday, the Senate voted 98 to 0 to renew the government tax credit for new homeowners, which was set to expire at the end of the month. Like before, first-time buyers will receive a $8,000 refund, and the program now has a new measure offering a $6,500 refund for "move-up" buyers, people buying a new primary residence who have owned their current home for five years.
Pending approval by Congress and the President, the extended program will also apply to more potential buyers—income caps have been increased from $75,000 to $125,000 for single buyers, and from $150,000 to $250,000 for joint buyers. The Wall Street Journal
says these heightened caps will include 14 percent of first-time homeowners who were previously ineligible for refunds.
So, what will this extension do?
According to
WSJ, Goldman Sachs estimates that the credits for both new and move-up buyers will lead to an increase in housing prices, as sellers will factor the refunds into their bottom lines. The government has already helped raise prices by 5 percent, says Sachs, with 1 percent of the increase coming from the current credit program.
The extended version of the program will run through April 30, at which point it probably won't be extended again. The Washington Posted
quoted Senator Johnny Isakson, who noted that programs of this nature rely on a "sense of urgency" that will disappear if deadline is continually postponed.
Are you happy to see the tax credit extended? What do you think of the changes?
Comments (6)
Considering I am in the market for a house, and haven't found one by the current deadline, I think it is a good thing. But I admit my view on this is probably biased by this.
@xsimplepleasuresx@xanga - Hehe. Well, good for you!
Sucks for those of us that dont fit into either of those categories!
You're not going to reinflate the housing bubble Congress! I know your masters in the financial world are trying ever so desperately to, but it won't happen. Prices must drop at least another 15-20%!
Oh, and you home buyers. You're welcome!
I am really glad they are extending it because my Husband and I are looking for our first home and we are trying to buy one in the next few months . That tax credit would really help out alot:)
Not only extending it, the income ceiling limit on the homebuyer has been increased from $75,000 to $125,000 or less for an individual ( $225,000 for a couple).
They also add another provision: the legislation would also provide a $6,500 tax credit for homebuyers, as long as they had been in their previous home for at least five years.
http://wealthandhealth.lefora.com