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Congress under pressure for giving more tax breaks to home buyers Many analysts believe that the credit stimulus is helping the housing market to recover from its previous waning state. The credit has resulted in the sale of several hundred thousand homes in the US. However, cynics contend that the credit has helped mainly those who were already planning to buy homes. They fear that if the credit does not expire in late November, it will cause the government a serious financial liability. The National Association of Realtors and many others in the real estate industry are putting pressure on Congress to extend the credit through next summer. They hope to increase the plan to $15000 and to allow all types of buyers to qualify. This program could cost anywhere between $50 billion to $100 billion. For many new eligible home buyers, the credit has come as a boon since many were already planning to buy new homes. The credit has helped them to indulge in their new homes. The sale of home furnishings and fixtures, and consumer durables has witnessed a steady growth since the introduction of the stimulus package. The period between August and the beginning of September has seen a 10% increase in mortgage applications. Analysts attribute this to renewal of confidence in the economic market, the fact that the credit may expire on November 30, and very low mortgage rates, especially in places like Dallas, Phoenix, and Las Vegas. In the past two years, many developers have converted apartments into condominiums. Even though the credit has helped the sale of many condominiums, many of the units are still unsold despite a rate slash. Analysts believe that nearly 40,000 sales this year have been the result of tax credit. A year back, the government kicked off the tax credit scheme by announcing a reward of $7500. It was later increased to $15,000 before reducing it to the present $8000 credit. Republican of Georgia, Johnny Isakson, who introduced the original Senate bill, has now introduced a new bill that would grant $15,000 to any home buyer, who would stay in a home for a period of at least two years. Economists are divided on their opinions about any new tax credit program. While some believe the absence of a generous credit may result in several foreclosures, others believe that the credit should be limited to first-time buyers only. Moreover, although the real estate industry is lobbying for the bill, it acknowledges that they may have to settle for less. |
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