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Deadline on First-Time Home Buyer Tax Credit

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By : Paul Escobedo    99 or more times read
The housing market saw an increase in sales during the month of August. That is the first time in the last five years that the sales have increased every month for a four month period. The sale of existing homes rose 7.2% in July from the month of June to set a 2 year high and the quantity of sales pending is 5% higher than the pace seen during the month of July 2008. Along with the number of sales rising, home prices are starting to climb in many areas across the nation. The Standard & Poor’s Case-Shiller home price index stated that the prices of homes rose in 18 of the 20 cities tracked during the month of June and those numbers are up from the 8 of 20 in May.

However, many of the increases in sales we have seen recently have been driven by the tax credit of up to $8,000 for first-time home buyers that are being offered by the federal government. Realtors have said recently that they have seen an increased interest in the tax credit. This is most likely due to the fact that, as it currently stands, the tax credit of up to $8,000 for first-time home buyers will expire December 1, 2009.

Real-estate groups across the nation have been trying to get congress to extend the tax credit beyond the current deadline. They are aiming for an extension from the Obama administration through 2010 and even an expansion to the amount of tax credit available from $8,000 to $15,000. Economic advisors in the White House are considering whether the tax credit should be extended as the current administration tries to ensure that the stabilization of the housing market continues.

It has been proven that the tax credit has increased the number of home sales in the country. Tax authorities in the United States stated in the second week of September that 1.4 million taxpayers have used the $8,000 first-time home buyer tax credit and they reminded buyers that if they intend to use the credit, they need to close on the purchase of their home before the December 1st deadline.

Because of the number of homes that have been purchased with the help of the tax credit, real-estate organizations and home builders all over the U.S. are nervous about what the expiration of the tax credit will do to the nation’s housing market. The real-estate industry has been arguing that not extending the credit could derail the emerging economic recovery.
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