This is a question I’ve been hearing a lot lately…”will the $8,000 home buyer tax credit be extended?” Unfortunately, I am no fortune teller, neither is H2 Realty’s lead Realtor Aaron Hofmann or any other real estate professionals that I know of. Here is what I’ve found though in doing some research.
There is no official extension.
Here is where things stand.
- There is bipartisan support in Congress for extending the credit past Nov. 30th. It is still unclear if it were to be extended, how far it would be extended, the size of the credit and how many more buyers would qualify.
- It is unclear what President Obama’s stance is on the issue.
- The latest idea under discussion is a credit worth up to $8,000 for first-time homebuyers and up to $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years.
- Proponents of the credit say that if it is allowed to expire, the housing market and the broader economy will grow moribund again.
- Critics state that of the nearly 2 million homebuyers who will have gotten the credit by Nov. 30th that only about 10% to 20% bough homes solely because of the credit.
With homebuyers rushing to complete their home purchase before the first time home buyer tax credit expires, a report Friday is expected to show strong September sales.
Home resales are expected to show an almost 5 percent increase to a seasonally adjusted annual rate of 5.35 million, up from 5.1 million in August, according to economists polled by Thomson Reuters. If the report meets forecasts it would be the best month for home sales in more than two years.
The National Association of Realtors’ report is scheduled for 10 a.m. EDT.
First time homebuyers and investors both are taking advantage of the low mortgage rates, short sales, foreclosures, and overall discounted homes. The buyers are also eligible to take advantage of the tax credit of 10 percent of the sales price, up to $8,000 so long as the sale closes by November 30, 2009.
With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.
One potential roadblock, however, emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.
At a hearing before a House subcommittee Thursday, J. Russell George, the Treasury Department’s inspector general for taxes, questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old, his office said.
While the program has widespread support in Congress, there are growing concerns about the costs. The cause, said Sen. Jack Reed, D-R.I., “is a worthy one.” But “I hope we can find ways to pay for it.”
Housing market research firm Metrostudy predicts a 37.9 percent decline in 2009 housing starts to a total of 562,000, but a steady increase in starts during 2010.
“Homebuilders are still challenged by economic conditions, and also by the lack of credit from banks, but there are some positive trends,” said Brad Hunter, Metrostudy’s chief economist and national director of consulting.
Most builders’ new home inventory is now under control. The past few months have been a time for builders to look internally and “trim the fat” so to speak. With most builders having things under control they can now again start to look towards future projects.
Whether the $8,000 tax credit is extended or not we should see a rebound in new home construction in 2010.
August marked the seventh straight month of increases in NAR’s pending home sales index.
There are lots of great deals out there! Find your dream home now, search Atlanta homes for sale.
That’s right…you read the headline. If you’re wanting to purchase a home within the next year you ought to be careful not to let your credit score go bad.
According to senior loan officers at large banks, lending standards will remain tight until the second half of 2010. The Federal Reserve Board’s survey revealed that an uncertain economic outlook and reduced tolerance for risk were the main reasons cited for tightening credit standards.
Although mortgage rates remain extremely low, being able to get a home loan will remain difficult with poor credit. To help you maintain a positive credit score we’ve put together the following:
- Late or missed payments
- Using more than 80 percent of your total amount of available credit
- Liens or foreclosures
- Periods of unemployment
- Too many requests for new lines of credit
Main factors that affect your credit score:
- Your payment history. The most important factor to a potential lender is whether or not you will pay your bills in full and on time. The more recent your good (or bad) payment history, the more important it will be for your credit score.
- Your outstanding debt. The more credit cards you have that are maxed out, the lower your score will be. As mentioned above, try to keep your credit card balances at 25 percent or less of your limits.
- The length of time you’ve been building credit. The longer your credit history, the higher your credit rating.
- The number of inquiries on your credit report. The more times you’ve applied for credit cards or loans, the more credit report inquiries will show up on your credit report. A higher number of credit report inquiries may indicate that you’re struggling financially or may have a lot of debt (even if you never used the cards or gotten the loans).
If you are interested in purchasing a home within the next year, but uneasy about your credit, contact us and we can work with you to make the American Dream of home ownership achievable.