From the AP and Diana Olick of CNBC
Last night the Senate voted cloture on a bill that includes the extension of the first time home buyer tax credit.
While this is not the final vote, it effectively seals the deal on the plan to extend the $8000 first time buyer credit through April 30th and expand said credit to move-up buyers on a smaller ($6500) scale.
On top of that, Congress already extended the higher GSE/FHA loan limits that were put in place to help more buyers take advantage of lower mortgage rates. And then there's the "Net Operating Loss" carryback extension, which I blogged about previously, and which will add more cash to the coffers of the nation's home builders.
Add it all up and it's another big vat o' juice for the U.S. housing market. Or is it?
Builders themselves say they are more likely to hold on to that NOL cash than to invest it in new jobs or new homes. And as for the tax credit extension, industry estimates are that this year's first time home buyer tax credit added 350,000 home buyers to the market who otherwise would not have purchased homes. These buyers were almost entirely on the low end of the market. 70 percent of home sales in September were of homes under $250,000.
Let's do a little math here, shall we?
A few weeks ago the Deputy Commissioner for Services and Enforcement at the IRS, Linda E. Stiff, testified before Congress that between January 2009 and September 2009 the IRS has processed claims from more than 1.5 million individuals or families who have purchased homes. So 350,000 is a little over 23 percent of 1.5 million. That says that at least 70 percent of buyers would have bought their homes without said credit.
