The $8000 non-repayable tax credit for first-time buyers is scheduled to expire 14 weeks from now. Will Congress let it expire? The National Association of Realtors and the National Association of Home Builders are working very hard right now to lobby Congress to extend the credit beyond the November 30th expiration date.
As it stands right now, first-time buyers must close their escrows by midnight of November 30th.That means they need to make their offers, get approved for a loan and get the funds, do all necessary investigations, and actually fund the loan and close the escrow. And as most buyers and sellers know, all of this is harder in this market.
The lobbying effort is targeting the two Congressional tax-writing committees, the House Ways and Means Committe, and Senate Finance. Delegations of real estate brokers and home builders are making their way to Congressional district offices to explain why the credit must be extended — number of houses sold attributable to the tax credit and the ripple effect on other industries.
According to economists at the National Association of Realtor, the credit will be responsible for 300,000 – 350,000 additional house sales this year. If we accept these numbers, we see that the housing credit provides a great return for the amount spent.
Congress may be listening. There are bills pending in both houses to extend the credit for another year. The L.A. Times reports that Senator Christopher Dodd, chairman of the Senate Banking Committee, is co-aponsoring a bill with Senator Johnny Isakson that would raise the credit amount to a maximum of $15,000.
It remains doubtful whether an extension can happen before the Nov. 30th deadline. But given the benefits of the housing credit, the odds favor some kind of extension.