Congress may be closer to extending the $8000 first-time buyer tax credit, but analysts disagree over the effect the extension may have.  One analyst, Robert Stevenson, said the Senate Committee’s proposal for extending the tax credit will have a “limited impact”on home sales.

Stevenson said that the main pitfall of the proposal is that it only pushes back the expiration of the tax credit to the end of April. He is skeptical that the extension will drive homebuyer activity over the slow winter months. He does agree that Congress could come back and extend it again.

Jerry Howard, President of the National Association of Home Builders, offers a different view. He believes that “failure to act now could derail the fragile housing recovery even before it has time to take root…the consequences would be devastating for both housing and the economy.” Homebuilder stocks were up sharply in the wake of the news of the Senate comprom,ise.

The compromise on extending the tax credit doesn’t mean it’s a sure thing, and the proposal still faces a vote in Congress. One potential snag is a recent government report that uncovered fraud and abuse associated with the tax credit. Thousands of ineligible taxpayers may have received millions of dollars under the program, according to the report.

This entry was posted on Wednesday, November 4th, 2009 at 11:07 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.