The $8000 tax credit for first-time buyers, passed by Congress last winter, is scheduled to expire on November 30th. It was originally passed to help the troubled economy through a financial crisis. Now the question has become whether the housing market can live without it.

This year, up to 40% of all homebuyers will qualify for the credit. And it’s on track to cost the government $15 billion, more than twice the amount that was projected.

Some analysts believe that this money has been well spent and that the stimulus package should be extended. The credit was supposed to fuel a recovery in the housing market, and that’s exactly what it’s doing. According to the New York Times news service, the credit is responsible for 350,000 – 400,000 homes sold this year.

On the other side are people that argue that the credit is going to people who would have bought homes anyway. They argue that unless the program expires on schedule, it will be one more government program that won’t die.

The National Association of Realtors is lobbying for the government to extend the program through the summer of 2010. Without an extension, proponents argue, there could be a downward movement in home sales and more foreclousures.

Economists agree that housing is a very important industry affecting employment in construction, furniture and appliances, and of course the real estate industry. And housing is where a lot of the problems started. So if we help the housing industry, we will get a lot of benefits compared to helping other sectors of the economy.

This entry was posted on Wednesday, September 16th, 2009 at 10:21 pm and is filed under Buyers, First-Time Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.