Why Congress Should Expand and Extend:
- NAR home sales data show that the portion of first-time homebuyers in the market during 2009 has been about 50%. Historically, about 35 – 40% of purchasers are first-time buyers.
- With prices affordable and interest rates relatively low, entry-level purchasers have more housing opportunities than they have had in decades. At the same time, there is an abundance of housing inventory above those entry level houses. For this reason, the credit should be expanded to all purchasers.
- As the December 1 deadline approaches, purchasers will race to the closing table relying on the $8000 tax credit. Every facet of the purchase process is more closely reviewed causing real estate transactions to take much longer to complete today than in the past. Short sales take a particularly long time to close because of the many bank approvals that are required.
- Current law requires that the transaction be closed in order for the purchaser to take the credit. It would be wrong to deprive purchasers who had entered into binding contracts well before the expiration date the opportunity to claim the credit. The credit should be extended to 2010 so that these purchasers are
assured they will receive this important credit.
- Expanding the tax credit to all purchasers and extending the deadline until December 2010 willfurther stimulate the economy, and ensure that there will be a vibrant housing market that can sustain its current momentum.
- Prospective buyers who meet the mortgage underwriting guidelines but do not have the upfront cash should be allowed to use the tax credit for the downpayment.
|