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Senators push to extend first-time homebuyer tax break

Alisa Roth Jun 16, 2010
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by Alisa Roth

Harry Reid and other Senate Democrats are pushing for an extension on a tax break being offered to first-time homebuyers. Under the original deal, buyers who were in contract by the end of April would have until the end of June to close. If that deadline is extended, they’d have until the end of September.

The tax credit was all about getting people to buy houses. Lucian Salvant at the National Association of Realtors says it worked almost too well. “The sheer volume of people rushing to get this tax credit in April 30 is causing a logjam in the pipeline for many lenders,” he says.

Salvant says if the government doesn’t extend the deadline for closing the deals, 180,000 buyers could lose out on the credit. Without it, they might decide not to buy.

Celia Chen, who follows housing at Moody’s Analytics, doesn’t think buyers will back out if the government doesn’t extend the deadline. “They’ve already decided to purchase the house,” she says, “they’ve already put down a large deposit on the house, if they don’t make the tax credit, I don’t think they would not purchase the house.

Chen says the tax credit’s helped the market in the short-term, but to really get it going again, we need more jobs.

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