Unfortunately it looks like the chances of a further extension to the home buyer tax credit are lessening by the day as stronger housing data and focus on reducing government debt and foreclosures emerges. Bloomberg reports that purchases of new homes in the U.S. surged 27% in March, the most in almost five decades as buyers rushed to qualify for the home buyer tax credit. The annual pace of 411,000 new home sales exceeded even the highest forecast of economists. Last month’s purchase rate was the highest since July 2009 and followed a record-low of 324,000 in February that was higher than previously estimated. Home sales increased in all four U.S. regions last month, led by 44 percent jump in the South.
The median price of a new home in the U.S. increased 4.3 percent in March from a year earlier to $214,000. The jump in sales brought the number of new houses on the market down to 228,000, the fewest since March 1971. The supply of homes at the current sales rate dropped to 6.7 months’ worth, the lowest level since December 2006, from 8.6 months in February. A report yesterday from the National Association of Realtors showed sales of existing homes jumped to a 5.35 million rate in March, the first increase in four months. Lawrence Yun, the group’s chief economist, said the government’s homebuyer tax credit “has done its job,” bringing more buyers into the market and stabilizing prices.
The Obama administration originally extended the credit in November 2009 and expanded it to include existing home-owners. To claim the home buyer credit you must have a signed contract by the end of April 2010, with the transaction to be completed by June 30 (see all the qualification details and claiming criteria in this article). You can submit an amended tax return with Form 5045 to claim the home buyer credit or file for it in your 2010 tax return.
While the home buyer credit is likely to lapse, there are some exceptions for certain groups who can claim the credit into 2011. For example Members of the Armed Forces and certain federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and still qualify for the home buyer credit. An eligible taxpayer must buy or enter into a binding contract to buy a home by April 30, 2011, and settle on the purchase by June 30, 2011.
I will continue to monitor this tax credit for any further updates and encourage you to subscribe (free) via Email or RSS to get the latest news along with all the other stimulus payments in 2010 and 2011.
4 thoughts on “Another 2010 Home Buyer Tax Credit Extension Unlikely Based on Stronger Housing Data. Armed Forces Members Have Till 2011 To Claim Credit”
>Home Buyer Credit = Greater Chance of Audit. About a fifth of all IRS examinations done by mail in the past six months were for people claiming the credit, National Taxpayer Advocate Nina E. Olson told a congressional committee.
>Bill – the above article is the latest news I have.
Tracy – The making work pay credit should be claimed via your tax return. If not then you need to file an amended return (https://savingtoinvest.com/2010/04/amending-your-tax-return-rules-form.html).
This recently updated article may help with refinancing: https://savingtoinvest.com/2009/03/will-my-mortgage-now-qualify-for.html (contact your bank to see if they place you in the program). Also freddiemac.com has information you can use.
The best thing to do is work hard and save to pay off your debt. It looks like you are on the right path.
>Hello, You mentioned I could contact you with any questions, well I do have a few. I just heard of the making it work stimulus payments in your tax refund, but we already did our taxes on-line. I believe we were eligible, but didn't claim this. What do we need to do from beginning to end? Also, we are a married couple, that own a condo, though it is only under my husband's name. We were extremely affected by the economy, due to my husband had been laid off for 6 months. We used all our saving's and he dipped into his 401 k. We have a lot of credit card debt now, but have had to resort to debt consolidation. Our credit is in the gutter now, but we have alway's maintained our mortgage payment's, and immediate utility bills to live. Also, our home is worth less then what it was bought for. We are paying more, but to stay a float. We are like alot of other people I am sure, but are we eligible for this refinancing, even when our credit is bad? it seems when my husband applied, that seemed to be the problem. Any idea's?
>Have you heard any further rumors of the existing homebuyer credit getting extended. I sure hope so. We are currently on the market but can’t seem to get a contract going before April 30th. I think the tax credit is really working and can provide a net benefit to the economy.