Tax Credit Extension Looks Good!

The First-time home buyer tax credit that is set to expire on November 30^th looks like it WILL BE EXTENDED for contracts written on or before April 30, 2010 and closed by June 30, 2010. The US House of Representatives passed the extension Thursday, November 5th with a 403-12 vote (would love to meet the 12 guys who did not vote for this). This vote by the House followed a unanimous vote by the Senate on the Bill on Wednesday, November 4th. The Bill now goes to the President and is expected to be sign by maybe as early as this week!!! The Bill also added two other noteworthy items. The first is a tax credit for existing home owners on new purchases up to $6500 (must have resided in current residence for the past 5 years). The second addition to this Bill was that it raised the income limits from $75K for single taxpayers to $125K and joint taxpayers from $150K to $225K.

It appears that our elected officials in Washington finally understand that this is one of the stimulus ideas that has actually worked. The first-time home buyer tax credit has truly stabilized home prices over the past several months and a lack of an extension of this credit would have certainly driven home prices 5% to 10% lower over the next 90 to 120 days. The addition of a tax credit for existing home owners should only enhance the power of this economic stimulus package in the real estate area.