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Moments ago, the U.S. House of Representatives voted by an overwhelming 403-12 margin to approve the Unemployment Compensation Extension Act (H.R. 3548) that included, as an amendment, the extension and expansion of the Homebuyer Tax Credit. The bill already passed in the U.S. Senate yesterday by a vote of 98-0, so now it will advance from Congress to the White House for President Obama’s signature. It is one step away from being signed into law, and the Administration already has signaled its support of the Homebuyer Tax Credit amendment as well as the President’s intention to sign the bill.

The homebuyer tax credit, due to expire in 28 days, would be extended through April 30 of next year.  The tax credit for veteran homeowners will apply only to those who have lived in their current residence for at least five years.  The credit for these buyers will be capped at $6,500 while first time buyers will continue to receive $8,000.

Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000 respectively.  Above those limits there are diminishing credits available.

The bill was passed as an amendment to legislation extending unemployment benefits.  The House is expected to vote on the bill before the end of the week.

The tax credit has fired the housing market, driving existing home sales to the highest level in over two years.  The National Association Realtors reported sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2 percent higher than the 5.10 million-unit pace in September 2008.

WASHINGTON — Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6% in September, and some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to home buyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

…

Industry representatives said uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March.

It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors.

“Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

This credit continues to help first-time homebuyers, but still leaves out a large group:  those who have owned a home for fewer than 5 years.  Should those current homeowners who are moving after owning their home fewer than 5 years be ignored?

What about those who need to move or relotate for employment?  Aren’t they still taking a hit selling a home even if they haven’t owned it 5 years?

What about those who are downsizing to avoid foreclosure with unemployment uncertainty?  Should they be left out?

What about those who are having other financial trouble due to divorce, etc.?

How do YOU think lawmakers did on this decision?

Click here to continue reading…

Just Passed!  The Tax Credit Has Been Extended for First-Time Home Buyers!
Others have been left out, click here to read more on the latest news.

We’ve heard a lot of good news lately in Austin, but and news on expanding the home buyer tax credit that expires this November 30th is great news.  There were many bills on the table for this plan and now this version looks very likely.  This tax credit would help the already recovering Austin housing market!

This news is good news, from Bloomberg…

By Dawn Kopecki and Ryan Donmoyer

Oct. 27 (Bloomberg) — U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.

The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30.

The new agreement, which is still being negotiated and may change, would grant the credit to borrowers who have lived in their current home for at least five years. Lawmakers want to keep home sales from slipping as the economy struggles to recover from the worst drop in home prices since the Great Depression.

The demand for new homes and condominiums may increase by “more than two times because you’re allowing step-up buyers into the equation,” said Andrew Parmentier, a managing partner at Height Analytics, a research firm in Washington. “ You just opened up a whole new pool of people who can buy into those empty homes and empty condos that were built out.”

The income eligibility for first-time homebuyers would remain the same at $75,000 for individuals and $150,000 for couples. The income criteria for step-up buyers would be $125,000 for individuals and $250,000 for couples.

The credit would be limited to homes costing $800,000 or less. There is currently no price cap on home purchases.

Unemployment-Benefits Bill

Lawmakers are trying to attach the legislation, which is also being considered by leaders in the House, to a bill extending unemployment benefits under debate on the Senate floor, said Richard Durbin of Illinois, the Senate’s No. 2 Democrat.

Senator Bill Nelson, a Florida Democrat, told reporters yesterday of the tax credit that “we should be able to extend that later this week.” Nelson was traveling with President Barack Obama on Air Force One to a speech in Jacksonville, Florida.

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By AUSTIN KILGORE
September 22, 2009 10:16 AM CST

[Update 1: Clarifies location of Campbell Communications]

A new study estimates the $8,000 first-time homebuyer federal tax credit resulted in 357,000 additional home sales so far in 2009.

The study, released by Campbell Surveys, a division of Washington, DC-based marketing and public relations firm Campbell Communications, conducted surveys of real estate agents and calculated the figure by comparing the rate of first-time buyers during the first two months of the year both before and after the tax credit was instituted.

The monthly rate of first-time buyers increased from 32% in January and February to 43% every other month of the year except July, when it was 42%.

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First time home buyers really have it make this year, especially in Austin.  Historically, the current “even market” is the closest we’ve had to a buyer’s market in Austin.  Pair great deals (not half-price deals like Las Vegas & Pheonix, but great deals for Austin real estate) with $8,000 free from Uncle Sam then add amazingly low interest rates beginning in the 4%-5% range… if there is anyone out there who has been considering buying their first home in Austin, now is definitely the time to buy.

I’m happy to go over the numbers with anyone to see how much money you are really saving.  Here’s a rough idea:

• 5-10% off the price of the home of what we would have seen if homes had continued to appreciate at their pre-2008 rate coupled with the motivations of frustrated sellers
• $8000 from Uncle Sam that can be used toward your downpayment in most cases (you no longer need to save as much)
• Interest rates in the 4%+ range instead of the early 2000′s or predicted 2010 6%+ range means lower monthly mortgage payments which can be $200 or more each month, or $2400 for each year you spend in the home

What you need:

• A decent credit score (sub-prime/high-risk mortgages are a thing of the past)
  
• Some cash for inspections & earnest money
• An income that can support mortgage payments – lenders prefer that your mortgage be less than 28% of your monthly income and total payments (mortgage + car, etc) to be leww than 35% of your monthly income
  

We’re hearing more and more good news lately, and it’s backed up by hard numbers.  When our real estate market has recovered before, particularly in Austin, it recovers quickly and suddenly.  Will we see this recovery soon?  Will the scramble for good, decent, or even okay deals hit us after Labor Day as experts have predicted?  The recovery does seem imminent and close.  Do you think that a time will come when buyers scramble off the fence?

NEW YORK (CNNMoney.com) — More Americans signed sales contracts to buy homes in July than in June, marking the longest streak of monthly increases on record, said a report released Tuesday.

The pending home sales index from the National Association of Realtors rose 3.2% in July after rising by 3.6% in June. That’s 12% higher than July 2008, and it marks the sixth straight increase since record-keeping began in 2001.

The reading far exceeded forecasts of economists surveyed by Briefing.com, who predicted a 1.5% increase.

Signed real estate contracts often take many weeks or months to complete, so they are considered a forward-looking indicator.

A new direction

Momentum in the housing market has clearly turned for the better, said NAR chief economist Lawrence Yun, in a written statement.

“The recovery is broad-based across many parts of the country,” Yun said. “Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit.”

The first-time home buyers tax credit, passed earlier this year as part of the economic stimulus package, is worth 10% of the home purchase price up to $8,000. People who have not owned a home in the previous three years are eligible for the credit.

However, the tax credit expires on Nov. 30 and it usually takes about 90 days to close on a house after a contract is signed. As of Sept. 1, there were only 90 days left before the credit ends.

[...Continue reading at CNN.com]

What do you think?  Will a time will come when buyers scramble off the fence in Austin?

Get your $8,000 HUD tax credit now

HUD tweaked stimulus tax incentive so first-time home buyers get instant assistance with down payment and closing costs.

By Les Christie, CNNMoney.com staff writer

Last Updated: June 1, 2009: 9:22 AM ET

NEW YORK (CNNMoney.com) — First-time homebuyers will now have access to quick cash to help them with their down payments.

On Friday, the U.S. Department of Housing and Urban Development (HUD) announced that first-time homebuyers using FHA-approved lenders can now get an advance on the $8,000 tax credit created by the stimulus package and apply it toward their down payments or closing costs.

“We believe this is a real win for everyone,” said HUD secretary Shaun Donovan in a speech before the National Association of Homebuilders (NAHB). “Families will now be able to apply their anticipated tax credit toward their home purchase right away. What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.”