Well, it’s not a full extension of the tax credit that many of us were hoping for. However, the tax credit extension that has been approved by both the House and Senate will alleviate those buyers who had signed a contract by April 30th but did not close in time. For many, the delay in closing was due to short sale negotiations dragging on longer than 60 or 90 days. Now these buyers will have until September 30th to close. This extension won’t be completely final until it is signed by President Obama. However, that is expected to take place by the end of the week.
UPDATE 1-U.S. Congress backs home tax credit extension
WASHINGTON, June 30 (Reuters) – The U.S. Congress on Wednesday approved a bill extending the closing deadline for homebuyers trying to take advantage of a popular tax credit.
Homebuyers with contracts signed by April 30 who failed to go to closing by the June 30 deadline will now have until September 30 to complete their purchases. The House of Representatives on Tuesday approved the bill and it now goes to President Barack Obama for his signature.
The $8,000 tax credit for first time homebuyers and $6,500 credit for others purchasing a new primary residence was a highly popular temporary measure by the Obama administration to jump start home sales during the economic recession.
Real estate agents said thousands of homebuyers would miss the June 30 deadline because banks and settlement offices were struggling to deal with the volume of people rushing to close on their deals.
“In addition to helping thousands of families experience the American dream, this successful and popular program provides a much needed boost to Nevada’s housing market and economy,” Senate Majority Leader Harry Reid said in a statement.Reid, a Democrat, faces a tough re-election fight in Nevada, where the U.S. foreclosure crisis is most pronounced.
The Senate acted separately on the tax credit extension after another bill that included both the homebuyers measure and an extension of jobless benefits for the long-term unemployed was blocked by Republicans.
The jobless aid bill fell one vote short of the 60 needed to overcome procedural hurdles in the 100-member Senate. Republicans objected to the $34 billion cost of the bill.
The Democratic-backed bill would have extended the federal jobless aid program through November. Senate Republican Leader Mitch McConnell offered a two month extension that was paid for by using unspent money from last year’s economic stimulus program and Democrats objected.
Ouch. So much contradicting news out there. You have two sides of the fence. One stating the housing market is improving and then the other who claim it’s not over yet. It will be even more confusing this month when the housing numbers for April come out. There will be a BIG surge with the housing numbers and everyone will think “Glory Days Are Hear Again.” I’ll call this “Hope Over Reality.”
Truly, what the government incentive program has done is caused anyone who was going to purchasing a home in 2010 to up their purchase to an earlier time to be able receive the financial benefit. No one or financial prop is going to make someone wake up and say…let’s buy a home. This decision is made because of a life changing situation, period. The housing market is what it is and until the inventory is a balanced point…somewhere between 4-6 months the housing market will continue to experience the challenges and unfortunately, adjustments in prices. It is basic economics of supply and demand.
Nationwide there is a 16-24 month supply of housing inventory including residential resales, new and bank owned properties. With a forecast that housing values will decline another 10-15% nationwide in 2010.
What this all means to the homeowner who is thinking about selling is be smart and price your home so that it will be one of the few which a home buyer will buy. What’s the old saying…”information is power or is it…the correct use of information is POWER.”
Freddie Mac Falls After Seeking $10.6 Billion From Treasury – Bloomberg.com
Freddie Mac, the mortgage company operating under U.S. conservatorship, fell 8 percent in New York trading after requesting $10.6 billion more in Treasury Department aid while reporting a first-quarter loss.