Time for Homebuyer’s Tax Credit Running Out, Will it be Extended?

The $8000 Homebuyer’s Tax Credit expires November 30th of this year, so for those planning on taking advantage of this by buying a home, time is running short. For those interested in taking advantage of the program, this means a house purchase must be completed by that date in order to receive the credit. Because many loans can take up to 60 days to process, many in the real estate and banking industry worry that the numbers will start tapering off in early October. At some point in the very near future, it is expected that mortgage lenders will stop taking applications on tax-credit loans unless it is extended.

There is movement towards extending the homebuyer’s tax credit through 2010, and increasing it to $15,000. Senator John Isakson of Georgia is leading the charge in Congress, backed by realtors, bankers, and homebuilders, who are also are promoting the tax credit extension with the tagline “Don’t Let America’s Real Estate Recovery Expire.” The American Association of Realtors estimates that appx. 350,000 home sales were directly attributable to the tax credit.

Some wonder if the tax credit is artificially inflating home sales, and possibly inflating home prices as well.

The White House says President Obama’s economic team is evaluating the effect of the tax credit on home sales- to determine their position, I imagine. It may be difficult to get the tax credit through Congress in short order though, with pressing issues such as health care reform looming over Congress and the Obama Administration.

Should the homebuyers tax credit be extended through 2010? Should it be increase to $15,000? Should it be available to anyone who purchases a home?

What are your thoughts?