Time winding down for home buyers

By DAVID P. WILLIS • BUSINESS WRITER • October 26, 2009
APP.com

With its expiration just over a month away, a push is on to extend the first-time home buyers' tax credit, which boosted the beleaguered housing market in the midst of a recession.

There are competing ideas out there to extend — and even expand — the tax credit, which gives up to $8,000 to first-time buyers who close on a home by Nov. 30.
In a press conference on Monday at the New Jersey Association of Realtors in Edison, U.S. Rep. Leonard Lance, R-N.J., said his bill would open the tax credit to all people buying a primary residence, regardless of past home ownership or income. He would increase the credit to $15,000 and extend the program through Dec. 1, 2010.
"We do not want the American dream to expire," Lance said. "We want to make sure as many Americans as possible have home ownership."

Lawmakers are under pressure from real estate agents and others in the housing industry to extend the credit.

The timing is critical, Lance said.

In New Jersey, more than 45,000 first-time buyers will claim the credit in 2009, according to the National Association of Realtors. An additional 6,500 first-time buyers have purchased homes this year over the same period last year, said Diane E. Dilzell, president of the New Jersey Association of Realtors.

"We need this to expand," Dilzell said. "We need this to continue because you don't want to stop something dead in its tracks. You want the momentum to keep moving forward."

Lance warned of a "extremely detrimental impact" if the program isn't extended, he said.

Dilzell said people would continue to buy and sell homes. "Will it continue at the same pace that it's been doing since the $8,000 credit? We really don't have an answer for that."

In the Senate, Senate leaders are negotiating to extend the credit and gradually reduce it through 2010, Democratic Sen. Bill Nelson of Florida said Monday.
Senate Majority Leader Harry Reid of Nevada and Senate Finance Committee Chairman Max Baucus of Montana, both Democrats, may seek to add the home buyers' extension to legislation extending unemployment benefits that may be debated as early as this week, according to Regan Lachapelle, an aide to Reid.

Another proposal by Sen. Christopher Dodd, D-Conn., Senate banking committee chairman, and Georgia Republican Sen. Johnny Isakson would extend the credit through next June and expand it to couples earning $300,000 or less, up from the current program's $150,000 maximum income eligibility for married couples.

The current program comes with costs. Congress allocated $13.6 billion for the home buyers' credit. As of July 17, 2009, more than 1.1 million tax returns claiming more than $8 billion in credits have been processed.

Lance said money from his proposal, needed in New Jersey because of the state's high housing costs, would come from unspent stimulus funds.

Boosting the credit further would help to create jobs, he added.

"New Jersey is also a state where we send a great deal of tax revenue to Washington and do not get much in return," he said.