[Update June 2010] : See this article for the latest news on the September 2010 Filing Extension for the New and Existing Home Buyer Tax Credit
With the deadline looming for the current home buyer credit that expires in April 2010 (with closing by June 30th 2010), many readers have asked if there is any update on a further extension of this popular tax credit. Recent housing data suggests that the housing market is still struggling with pending home sales dropping nearly 8 percent recently. The drop in pending (contract) home sales and unexpected declines in purchases of new and existing homes last month, adds to evidence the housing market, at the center of the worst recession since the 1930s, is still struggling to rebound. So the question a number of realtors, housing industry members and would be home buyers are asking is that will the home buyer credit be extended again past summer?
Undoubtedly there is significant negative sentiment for the home buyer credit, particularly from those home buyers who could not take advantage of previous versions with lower income limits and from most conservative groups and fiscally focused politicians who want the home buyer tax credit to expire as planned. However, in addition to allaying the weakness in the housing market, extending the home buyer credit again could be a smart political move in an election year. Lawmakers, now more than ever, are looking for any successful mortgage and/or housing-related program that they can stand behind. Besides the Fed’s mortgage-backed securities (MBS) purchase program, the homebuyer tax credit has been touted by some as an extraordinary success. Such, “success” can be claimed, providing the necessary political cover to advocate extending the program… especially since the simple fact is that it if doesn’t work — that is, if it’s not being utilized — that it costs nothing. Deficit issues and the concept of whether we’re rewarding those who might have bought anyway will take a back seat. Keeping home sales going promotes home price stability, and that makes for less-grumpy voters as election time rolls around.
As of yet, there are only a few official rumblings about further extending the home buyer credit for new and existing home buyers. However, if the housing market and political climate continues to deteriorate I would not be surprised to see the credit extended again (albeit with slightly different conditions) to at least the end of the year.
I will keep monitoring the status of this credit to see if an extension is proposed in any new bills and encourage you to subscribe (free) via Email or RSS to get the latest updates on the extension of this credit.
$250 Social Security payment
The other popular topic on this site is related to the proposed $250 social security payment in 2010. A number of social security recipients were awaiting this payment in lieu of a COLA increase, but unfortunately the Democrat-controlled Senate has rejected a measure by a 50 to 47 vote. The jobs bill, which contained the $250 SSI provision, was rejected despite President Obama’s backing. The payments which would amount to $13 billion, where earmarked in the jobs bill – which was deemed too costly by lawmakers trying to allay their image of big spenders.
The badly needed Social Security payments would have helped 57 million seniors, a risky number to overlook considering the fall elections and how badly Democrats are viewed ever since the recession became a reality. Now that lawmakers have slapped seniors in the face the historical return is that this year marks the first time since 1975 that Social Security beneficiaries didn’t receive a cost of living increase. An extra payment may become a reality later this year if a new jobs bill is introduced to further extend unemployment benefits or the COLA provision in President Obama’s budget is approved