Homebuyer tax credit extension fails to pass
A measure that would have extended the homebuyer tax credit for another three months failed to make it out of the Senate, reports indicate.
The extension – added as an amendment to a jobs bill on which the Senate voted last week – would have given homebuyers until September 30 to take advantage of the credit, which provided as much as $8,000 to first-time buyers and $6,500 to existing homeowners. The amendment enjoyed broad popularity, but Republicans derided the bill to which it was tied as wasteful.
That bill would have provided billions of dollars in Medicaid funding to state governments. Many states had been counting on the money and are now crafting fiscal-2011 budgets without it, the Associated Press reports.
Republicans argued that the bill was unaffordable. It would have added $35 billion to the nation’s ballooning deficit – so the GOP’s argument isn’t exactly specious. But those in the real estate industry are no doubt disappointed that the tax-credit extension failed to pass, as home sales have plummeted in the wake of the original credit’s expiration.
Last month, the National Association of Realtors says, existing-home sales slipped 2.2 percent. More troubling is the new-home sales figure: According to the Commerce Department, sales of new homes fell nearly 33 percent from April to May. On an annualized basis, just 300,000 new homes were sold last month – the fewest ever recorded.
The NAR argued that the extension would have helped 180,000 buyers take advantage of the credit. Due to lender constraints, the group said, borrowers who submitted their paperwork on time will not be credit-eligible.
"It would be a tragedy for them not to be able to complete the purchase in time to claim the credit," NAR president Vicki Cox Golder said.
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