In an effort to stimulate the housing market, the government is providing first-time home buyers an $8000 tax credit if they close on a new house before the end of November. As that deadline looms, a new effort is afoot to not only extend the tax credit, but improve upon it.
There are two proposals gaining support in Washington, DC. One merely extends the existing tax credit offering for a period of 6 months or one year. The second, more radical one was started by the National Association of Home Builders and asks to extend the credit through Dec. 1, 2010, and open it to all people buying a primary residence. It is also proposed to raise the tax credit to $15,000. It estimates that this would boost home sales by nearly 400,000 next year, creating nearly 350,000 jobs.
Senators are split on which proposals to support, but the feeling is that there will be some sort of continued stimulus available to help American realize the dream of home ownership.
To date, approximately 314,000 home buyers have taken advantage of the tax credit. The home builder, realtor, construction, title insurance and architecture industries all believe the credit has helped to stabilize the housing market and also boost the broader economy.
Industry groups contend that not extending the tax credit could jeopardize the fragile housing recovery, creating more costs for the government down the road. They point to an oversupply of homes on the market and the threat of another wave of foreclosures to argue that the credit is still needed to prop up demand.
Regardless of the future of the home buyers tax credit, now is a great time for you to buy.