According to today’s New York Times, Congress will not only extend the current homebuyers’ tax credit, but will also liberalize the program. The article reports that the credit, currently slated to expire at the end of November, will go through April 30, 2010, would no longer be limited to only first time buyers and will apply to people with higher income limits.
The newest legislation, if agreed upon by both the House and the Senate, would increase income limit eligibility for the $8,000 credit for first time buyers to $125,000 for individuals and up to $225,000 for couples. Under the current plan, individuals are phased down after $75,000 and couples after $150,000….so the new limits are quite generous. In addition, a credit of up to $6500 would be allowed for “repeat” buyers…so this program will potentially encompass a much larger buyer pool.
Thoughts?
Licensed in Virginia, Maryland, and D.C., Kevin Koitz, with The Koitz Group @ Long and Foster RE specializes in Washington DC real estate and surrounding luxury communities in Montgomery County Maryland. Visit his Bethesda real estate guide or his Georgetown real estate page to get a flavor for some of DC’s finest areas.
Excellent. Kudos to Washington for increasing limits and creating an incentive for ‘repeat’ buyers.
Either way this tax credit extension is a bad deal for Americans all together and a huge misfortune for generates to come. Socialism is not the answer.
Robert, I appreciate your opinion, but highly disagree.
Calling this socialism is completely sensational. We’ve never had a truly free market, and unregulated free markets have become catastrophes time and again. Would you have preferred that the government allow the Great Depression to “work itself out?”
The tax credit passed the senate 98-0 – huge bipartisan support. The majority of economists agree that it’s a smart play. I don’t think an additional extension will be necessary, or will be backed in June. However, if it looks like the housing market still needs support until the job market can support it, I will back it at that time.
Amazing to see 98-0 support! But it is real estate that will help lead the way out of recession. Liberalizing the credit by making it available to not just first time homebuyers will be really helpful!! I enjoy your blog.
Yes we needed it to continue and any other program that may help the real estate market. Things have pick up a bit in Bergen County New Jersey. I hope it continues and the incentives do help. Now they added the non forst time buyer $6500 also.
I am super super psyched for this credit!! I am in the process of purchasing a home, and thought I was going to miss the cutoff, so this is good news for me!
@ Harold – Thank you and sorry for the late response. I remember when Obama first announced his plan (February?), and my Dad, who worked on The Hill for 30 years as an economist said, “not enough” (in more words!).
@Richard – It’s picked up in DC at many price-points too. Hope it continue to pick up for you too…
@Robert – A week later, and already seeing the increase in activity, it’s easy for me to agree with Eric — which I did and do.
I’d would even argue the credit should be commensurate with conforming loan limits. So if $8,000 is base, those in with a $729,750 conforming limit could qualify for a $20K tax credit. It wouldn’t be for the people who would need it to qualify. It would be for the people who are exceedingly well qualified who need to feel a little more incentivized to take “the risk” in this market…IMHO, and perhaps just for certain markets, it’d psychology over necessity.
Thoughts?
I can’t decide if I like this idea or not. While it helps first time buyers, I think that it could possibly perpetuate the current problem that we have, this will be known only years down the line. I hope this works out for the best, though.
The first time home buyers credit its a great thing for our countries real estate market. We need a spark as a real estate market and this has helped alittle. I am glad they extended it.
The one thing that caught my eye was the move-up tax credit for the home buyers already in a home. I work with a number of repeat buyers and that small incentive has a lot of them thinking about making a move now. The challenge is that the credit is not good for investment property – which is really what we need to get out of the market right now – the foreclosures and short sales to get the property prices stabilized.
Great comment about credit