Tax Credit Brings Hope to Housing

The housing market received what should prove to be a real boost when, earlier this month, Congress and the President extended the first-time home buyer tax credit that was set to expire on Nov. 30 into the spring and expanded it to include eligible move-up or repeat home buyers.

First-time home buyers will now be eligible for the tax credit if they sign a contract by April 30, 2010, and settle on their home no later than June 30. Likewise, move-up/repeat home buyers (existing home owners) who have lived in their primary residence for five of the last eight years will now be eligible for a tax credit of up to $6,500.

The tax credits are expected to boost new and existing home sales by 180,000, including sales of about 40,000 new homes and 26,000 in sales of vacant homes. These sales are also expected to generate more than 200,000 new jobs, primarily in residential construction and related fields but also through the jobs created by the ripple effect of the new construction jobs and the additional spending power of the tax credit recipients. While the boost will be temporary, this is just the medicine that housing needs at present.

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