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Obama signs homebuyer tax credit extension
November 6th, 2009, 12:05 pm · 50 Comments · posted by Jeff Collins
President Barack Obama signed the homebuyer tax credit into law today, extending the popular $8,000 credit for first-time homebuyers.
The credit, which was to expire at the end of this month, will be available through next June as long as the buyer signs a binding contract by the end of April.
- The program is expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.
- Read more about the measure: HERE!
- For a technical explanation of the bill, CLICK HERE!
Reactions:
Dick Gaylord, RE/MAX Real Estate Specialists in Long Beach and 2008 National Association of Realtors president:
“I think it’s great. … Our economist talked about the thousands of people who were able to buy a home because of it. I think it’ll continue to fuel the first-time buyer market. Also, individuals who own a home are going to be able to avail themselves of it. … I think that will be very, very helpful to the market.
… I’m on my fourth first-time buyer, and the reason they want to buy is the tax credit.”
Jean Tietgen, Star Real Estate, Huntington Beach and the 2010 president elect of the Orange County Association of Realtors:
“I’m happy. … I’m working with a couple of first-time buyers, and I know it will be a tremendous incentive for them. … For my clients’ sake, it’s beneficial.”
As for the new provision extending a tax credit for repeat homebuyers: “It might stimulate the housing market a little bit.”
James Liptak, president of the California Association of Realtors:
“C.A.R. applauds our federal representatives for realizing the benefits of the federal tax credit and the role it has played in the ongoing economic recovery. More than 1.4 million first-time home buyers nationwide were eligible for the initial credit. We expect that number to increase dramatically in the months ahead.”
Rep. Jim McDermott, D-Washington:
“The homebuyers’ credit has helped pave the way for stabilization in the housing market and contributed to three consecutive months of rising home prices. Its extension will continue to make homeownership more affordable and bring confidence to a housing market and economy that remain fragile.”
Charles McMillan, president of the National Association of Realtors:
“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market. This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”
Opinions …
- Huffington Post: Faux Stimulus Is No Stimulus
- Heritage: Stimulus Plans Should Think Past the Needs of Special Interest
- How Critical Is The Credit? (Housing Doom)
Other real estate trends:
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Big Mistake. But there’s something else…how “Freddie, and Fannie” are going to buy Tax-Credit-Mortgages. When both are broke??
And asking pre-foreclosures, and homeowners under modifications, to rent their distress houses from freddie, and fannie.
The Title of the article should be “FREDDIE/FANNIE LANDLORDS”
FM squared are in trouble. The printing party will continue…rates will possibly rise next year (many thought they would this year) and those who are buying now are most certainly buying for the long haul.
Buying for the long haul…..yep. It’s going to be a long haul for them.
Mulli-
You almost sound doom & gloom-ish here?
Kind of hard not to, watching the .gov make bad decision after bad decision, no? Hey, at least the median is up.
As opposed to oversimplistically optimistic?
Does anyone know if the 8K tax credit would affect my unemployment benefits? I bought a home earlier this year & just recently got layoff. Would I be able to collect the tax credit without jeopardizing my unemployment?
Don’t worry, you become a renter soon as part of the deal.
lol. funny but makes sense.
W.-
It won’t be affected. You could theoretically have zero income and file a tax return for an $8k refund.
Liar is right……and one other thing…….STOP MAKING THOSE PAYMENTS.
No one else is.
Man you have the best of all worlds….no work, unemployment bennies for life, no house payments, and the big 8K is on the way.
Relax. It’s the new American way.
Sooner or later someone will bail you out…..those meanies made you do it, it’s not your fault.
Be really careful of the bailout though. You don’t want to get stuck paying for anything.
You guys are alright. We’re got some NAR quotes to naw on, AND a positive prediction from those undie warin’ Chapman guys! Say Hallalooya!
http://economy.freedomblogging.com/2009/11/06/chapman-says-california-layoffs-slowing/
BTW, three or four of our favorite denisons of the……den……are posting away at the very thought that CU could or would dare post the numbers!! LLLLLLLLLLLOOOOOOOOOOOOLLLLLLLLLLLLLLLLL
At least you’re paying attention
I’ve mis-judged you Lol
I am everywhere………and nowhere……….
Ever heard of holiday employment?
Now for the real test to determine if VOR has brainwaves: When would you guess holiday employment might taper off ?
You know, I have. Have you ever heard of “r-e-a-d-i-n-g”? The article clearly is not about holiday employment. They attribute it to; “The sharp increase in the third-quarter real GDP growth undoubtedly has influenced the turnaround in the indicator series.”
But, on the other hand, we all want to know…., when WILL your holiday greeter job at CVS taper off? Do you have to dress up like Santa? lllloooollll
Is this an extension of that lovely program acessed by those under 18; illegal aliens; and a 4-yr-old ? That one ?
Hmm…
question. what happens when you stop pulling forward demand. plug your ears.
My drunk uncle used to pull that one on us……
LOL…
That explains a lot!
Grr, wish they backdated it a couple months, lol.
I don’t understand why the are excluding people who’ve owned for less than 5 years either.
I dont’ understand why the government is not giving $6500 tax credit to those who are responsible homeowners and who are current on their mortgage, and have lived in their homes for at least 5 years.
What’s wrong with our government? Why can’t we get a bail out too? Heck, if I save $6500 in tax credit, you can be damn sure I will recirculate that tax savings back into the economy.
Wow,
There area lot of un-informed (realtors aside, cause they should know better), that are suckered into the short gain… again. Save the $8k now, cause your house will be worth $20k less next year.
Why does the government interfere with natural leveling. Their ‘help’ only persuades the un-educated buyer into a new mess that they will regret. Sad sheeple.
Don’t you get it? This is all part of Govt policy - aka transfer of wealth from the private sector to the public/Govt central planning sector. ie., Govt’s latest plan for delinquent/default homedebtors. As long as you transfer the title of your home over to Fannie, they in return will rent you back the home at 31% income to debt ratio for 12 months, then review for an extension so you dont have to move…
Lollllll, It doesn’t get any better than that.
All these realtors talk about how great these extended tax credits are. Well, how about offering DEEP commission discount to help out these home sellers so that the cost savings are passed on to the home buyers? No? I thought so!!!
Realtors would rather use taxpayers money to benefit their own pockets…..(agenda)
Excellent point.
The way Obama and the Democrats are seeing things: Let’s the rich pay their “fair” shares. They are hiking an additional 5+% income tax on couples making more than $1mil ($500K for single) to pay for universal healthcare. That’s only 5%; the rich can afford to be taxed some more to cover the housing crisis. “Political Office is the last refuge for a Scoundrel”
Not hiking, just rolling back the way it was, And shut down so many loopholes.
Obviously the tax-cuts help the country to go down big time.
And you actually believe that the loopholes will be truly shut down for these guys? There are over 237 millionaires in Congress, do you really think that they will really try shut down loopholes so that they will pay more in taxes? For every so called loophole that they close, they will create 2 new ones…
Of coarse not. no for one minute
But soon not even the rich would like to live here. The Country is long overdue for a real revolution.
If we go back in history (French-Revolution) started because the Oligarchs was getting away without paying their taxes, And oppressing the poors to pay for it.
Well the Guillotine took care of them alright.
And today France is a power like Germany. And the Irony is that they are socialist. Something that many here do confuse that with Communism.
Right now we don’t even have Capitalism. What we have is Gansterism, From the last 30 years.
“…contributed to three consecutive months of rising home prices. Its extension will continue to make homeownership more affordable…”
So the tax credit has contributed to making housing less affordable (rising prices) but will continue to make homeownership more affordable….derrr
HAH!
Obama is blowing more bubbles!
How is this any different from what started the mess??
0% down and free money to buy a home with!!!! HAH!
They must be TERRIFIED to let the home values to correct to a sane price of 3x-4x of the average income!!!
HALF THE COUNTY WOULD BE UNDERWATER!!!! HAH!
Hold on, folks. It’s going to be an awfully bumpy ride!!!
Say a prayer that we don’t go off the cliff!!!
Becareful not to speak the truth here. I just got banned for that
It’s all about trying to stem the walk-aways….the planned defaulters.
They (everyone with no equity) have the potential to bring the whole thing down.
Some serious trouble this contry is in.
People can now save 8,000 in taxes yet pay 8,000 more in the price of the home than they would have because of listing price increases. It’s a net gain for the banks, home owners and realtors. A wash for the buyer. Obama is still helping the banks while looking like the good guy for appearing to help the average joe. Smart ain’t he. Actually, it’s necessary to keep us out of the tank but don’t think he’s trying to help buyers or he would let the market take over.
2 cents,
That post was not worth 2 cents. The tax incentive doesn’t raise the price of the house.
The housing market didn’t get to where it is by normal market forces. It got there by bogus loan practices. So, letting it implode because of these artificial forces doesn’t make sense. The only reasonable way back is through carefully cushioning the landing. Otherwise, we’re all dead.
See?
The contradiction here is from a 2 cent realtor education.
VoR,
What? You may be right about engineering a soft landing but pulling forward demand, but how can free money tied to a specific product not raise the price of that product?
Think about it: the only way you’d be right would be if only 1 bidder per property had access to the credit, with all bidders having identical purchasing power. Two bidders could run the price up in one round of bidding.
Very thoughtfail of you.
droom
Why wouldn’t you trust normal market forces (i.e. bargain hunters) to cushion the RE market before it collapsed? After all, bulls always cite foreign buyers, investors, and simply those psychologically conditioned for home ownership as natural players in the demand equation.
VOR,
It’s basic economics. If you increase liquidity and therefore demand you increase price. Haven’t you been watching the market?
2 cents
Picture this.
Sales fall because all the gullible jumped in the last couple months to get the “limited time” 8K tax credit.
Now the urgency is gone and sales continue to tank as prices continue on down to a semblence of balance, in relation to income and employment.
Who would this surprise?
Still stuck in 2005 I see.
The tax credit actually raised the average price home by $40K according to GAO. And their data is unvarnished, unlike all the other statistic reporting agencies and NAR
I (probably foolishly) thought that this fall might be a good time to get a steal of a deal on a house. This was before the extension/expansion was signed. I won’t overpay and am suddenly pessimistic that I will find anything. I’m not interested in bidding up properties that are already overpriced in most cases. I’m happy to keep renting at a significant discount to a mortgage and invest elsewhere while I wait to see what happens to RE in the next 2 years. I may be proved wrong if I end up waiting, but it’s a risk I’m willing to take.
Look at the fundamentals. The current RE market can not be sustained without real employment and income growth. Yet, as evidenced by the last “recovery”, globalization and rising productivity has most likely ensured that the next recovery will be jobless too. ….Unless the world goes crazy once more and lends consumers money to bid up assets to bubble prices.
To those who worked and saved to buy a home, sorry.
That doesn’t mean that the bottom is going to give us another 10 years of positive growth. No way. This is a temporary bottom with high inflation and interest rate bubble ready to burst. How do we pay the debt? Through increase taxes and interest rates. Especially in an economy that has no drive, no new inventions such as internet , cell phones, plasma tv’s. How is real estate going to bottom if there is no drive to purchasing power? It’s not! This is all government intervention and will not be sustainable.
Obama, pelosi, reid- worst polictians ever? No investment is safe when these turkeys are around. They hurt america so much. Lets boot them OUT!