August 18 2009

Homebuyer Tax Credit Ending Soon

by brook

The homebuyer tax credit could be ending soon. Although polls show that the President’s stimulus package failed to impress average Americans, there is one component of the federal spending program that many are happily benefitting from: the $8,000 tax credit for first-time homebuyers. Now, with markets bottoming out and recovering nationwide, it appears this is one spending measure that may have done its job.

According to a Bloomberg report released this week, confidence increased in three of four market regions, led by a jump in the Northeast. The South was the only area where housing market confidence fell. The report also disclosed that combined sales of both new and existing homes have risen for four out of five months since January. The National Association of Realtors projects 350,000 additional first-time buyers will own homes thanks to the tax credit.

But now, as the end of summer nears, many of these prospective buyers are scrambling to locate properties and close deals. Why? Because the clock is ticking for borrowers; the expiration for the first-time homebuyer tax credit is November 30, 2009. But that’s not all. 

According to a Reuters report this week, borrowers need to have their offers accepted by the end of September to assure lenders enough time to beat the November 30 federal deadline.

Is there still time for first time home buyer benefits and prospective buyers to take advantage? If they act now. With most escrow periods lasting between 30 and 60 days, the window is quickly closing. To receive an $8,000 credit to put toward upgrades, landscaping, or repairs, the time to buy is now.

However, if you’re still saving up for a down payment or cleaning up your credit history – making a 2009 purchase an unlikely option – you still have something to look forward to. Experts cite record-low mortgage rates and pockets of economic strength as signs that home buying is more fathomable than it was last year.

In any case, real estate experts concur that the market is on a sustainable path. And while there is a concerted industry effort to extend the tax credit program into 2010, it appears that such a prospect is unlikely at this point. In a nutshell: Qualified buyers should act before it’s too late. 


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