According to a recently published USA Today® article, lawmakers and businesses are requesting an extension for first-time homebuyers.
The article states that first-time buyers make up 40% of home purchases, according to the National Association of REALTORS® (NAR), which is about 5 percentage points higher than the past historical average.
Bernard Baumohl, an economist at the Economic Outlook Group, says, “I’m fairly confident that (Congress) will extend the tax credit, because it is so important that housing come back.”
There are several proposals in congress right now. Some include:
- A Senate bill to expand the tax credit to
$15,000 for any home buyer regardless
of income
- A House bill to keep the $8,000 credit in
place until June 2010 and expand it to all
home buyers
- Eliminating the income caps for singles
earning more than $95,000 a year and
couples who earn more than $170,000
Current proposals:

•A Senate bill to expand the tax credit to $15,000 for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.

“It would go a long way toward inducing trade-up buyers into the market,” says Lawrence Yun, chief economist at the NAR.

•A House bill to keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It also would provide a $3,000 credit to homeowners who refinance.

•Another bill in the House, introduced by Rep. Eddie Bernice Johnson, D-Texas, would extend the credit to all home buyers through 2010.

The Business Roundtable, a consortium of CEOs from large companies, urged Congress this month to expand the tax credit to $15,000 and make all home buyers eligible.

“The issue is how do we stimulate the move-up market, and that’s essential for the economy,” says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker, Sotheby’s International Realty and ERA.

“I think it’s going to be a bipartisan effort,” Smith says. “The issue is how to pay for it.”

The current tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000. Some business leaders want the income caps eliminated.

Buyers do not have to repay the tax credit if they occupy the home for three years or more.

“A lot of people are taking advantage of it,” says David Thomas, a Realtor in Washington, D.C., who adds that expanding the credit would boost the market. “That would be a fantastic idea, to enhance and expand the incentives.”