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Home buyer tax credit to expire
This advertorial article is provided by the Dulles Area Association of Realtors.The $8,000, first-time home buyer tax credit expires Dec. 1. A home buyer is eligible for the tax credit only if the home is "purchased" before Dec. 1. That means that buyers have to find a house, complete a contract, satisfy any contingencies, secure financing and go to closing by Nov. 30.
Accomplishing those tasks by the expiration date will become more difficult each passing day. In today's market, it generally takes between 45 and 60 days to go from contract to closing. The National Association of Realtors claims the current credit has helped to bolster the economy by creating the momentum that had been absent from the housing market.
In the interest of building on that economic momentum, NAR is working to urge Congress to extend the credit because:
- The tax credit has been effective. NAR research suggests that as many as 350,000 sales this year can be directly attributed to the availability of the credit.
- The tax credit stimulated market activity. The volume of housing sales has improved steadily every month since the credit was enacted. The credit pulled people from the sidelines and created some momentum that had been absent.
- The housing market remains fragile. The market has improved, and prices have stabilized in many areas, but the market has not fully corrected. Retaining the credit sustains that recovery.
- Inventory may remain unusually high. The waves of foreclosures due to sub-prime and other improper lending practices are working themselves through the system. Presently, high unemployment rates pose a threat to homeowners and could set another round of foreclosures in motion. If foreclosure rates were to spike again, inventories could become bloated. Incentives are still needed to keep the market moving.
- Home sales continue to stimulate economic activity. The economy will never fully recover until the housing markets fully recover. Thus, the tax credit stimulus is still needed. NAR estimates that every sale generates approximately $60,000 of additional economic activity. And expanding the credit beyond first-time home buyers would give the economy a much needed kick.
For more information on the tax credit and efforts to extend it through 2010, please visit the Dulles Area Association of Realtors Web site, www.dullesarea.com.
-- Courtesy of DAAR
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