In an eleventh-hour negotiation, the provision for a $15,000 home buyer tax credit, in President Obama’s “stimulus package”, is most likely dead as presented. Instead, the lobbying efforts of the National Association of REALTORs and the National Association of Home Builders will most likely result in a glass half-full:
Congress seems to be near a final stimulus bill that will slash a Senate provision to give home buyers a 10% tax credit up to $15,000. Instead, Congress appears likely to eliminate a repayment requirement on a more modest $7,500 credit.
Justin McHood covered a basic outline of the proposed legislation on Mortgages Unzipped. Many comments and questions resulted in this closing advice from Mr. McHood:
Wait until the economic stimulus bill passes. And if it does pass, at that point, we can then analyze whether or not there is any kind of tax credit - and if so, how much and what the stipulations are.
While this is a blow for the real estate industry, the measure stands to save taxpayers some $32 billion. The median price for Southern California home remains is 3.5 times the $75,000 limit so most SoCal home buyers will lose from this recent development. No information was available about the July 1, 2009 deadline.
Buying a home makes economic sense in some areas of the country. Low mortgage rates and diving prices have contributed to the sharp increase in number of existing home purchases in December, 2008. A tax-credit, while a tasty dessert for hungry home buyers, may not be the necessary main course that the free market may already be serving.
