An additional tax credit extension to keep the moribund U.S. housing market from getting even worse was being considered by Congress. The deadline for real estate closings to qualify for a federal home buyer tax credit worth up to $ 8,000 Wednesday night. The House voted to extend the tax credit closing deadline to Sept. 30 for buyers who met the April 30 deadline to have a signed contract. But in the Senate the measure is part of a larger bill that also would extend unemployment insurance. If the tax credit extension is not approved, thousands of potential home buyers will be left in the lurch.
Post resource: Tax credit extension depends on fate of unemployment extension by Personal Money Store
Tax credit extension would affect 180,000 deals
The real estate industry has high stakes as the Congress messes with the tax credit extension. To be eligible, home buyers needed to have a contract in place by April 30. The tax credit closing deadline was at first June 30. But it was reported by MarketWatch that the National Association of Realtors estimated about 180,000 buyers could kiss $ 8,000 goodbye if the original tax credit closing deadline is upheld. A big problem for buyers has been getting the mortgage approval on time as mortgage lenders work through a pipeline clogged with thousands of applications.
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When the contract signing deadline expired April 30, the last-minute home-buying rush overwhelmed all of the companies which were responsible for handling the sales, including mortgage lenders, appraisers, title insurers and real-estate brokers. The Wall Street Journal reports that the bottleneck has especially affected short sales, where a lender allows a home to sell for less than the amount owed. In contrast to normal sales, where only two parties negotiate the price, short sales, resulting from foreclosures, are much more time-consuming because they require all note-holders to agree on price. Realtors say the short sale bottleneck is even putting normal sales at risk.
Critical is what they’re calling the unemployment extension
Nearly 3 million taxpayers successfully claimed the home buyer tax credit through May 22 — totaling more than $ 21 billion — according to the Treasury Department. It was reported by the Associated Press that Senate Democrats have combined the tax credit extension with an unemployment extension for laid-off workers whose benefits are being phased out to the tune of more than 200,000 a week. Democrats have tried for numerous weeks to pass the unemployment extension as part of a larger tax and spending package, but the bill died within the Senate last week. Republicans who were opposing the measure want to pay for the unemployment extension with unspent money from last year’s massive economic recovery package.
Extension isn't going to help US housing market
The tax credit extension might help homebuyers who are waiting to close some of their deals, but it may have little to no effect on a U.S. housing market that appears to be withering on the vine. The home buyer tax credit was the catalyst that boosted all of the existing home sales in April by 23 percent from a year earlier. New home sales increased 47.8 percent. But when the homebuyer tax credit expired, home sales in Might fell to the lowest levels since the Commerce Department began tracking home sales statistics in 1963.
Discover more data:
Marketwatch.com
marketwatch.com/story/new-deadline-for-home-buyer-credit-nears-approval-2010-06-30?reflink=MW_news_stmp
Wall Street Journal
online.wsj.com/article/SB10001424052748703627704575298610215024500.html?mod=WSJ_latestheadlines
Associated Press
google.com/hostednews/ap/article/ALeqM5hLKyB9H7lUpiALFVlU7RRJa9-EfwD9GLKOT80
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