I'm going to weigh in on this one. In short: let the credit die. Those who are able to cash in on the credit are fortunate. But when you think about it, $8k may only cover closing costs and when viewed as a percentage of a home's purchase price, it isn't very much.

I believe many potential home buyers who were "on the fence" and claimed that the $8k factored into their decision to purchase a home would have taken the plunge without the credit. The credit isn't luring people like me who can afford to buy, but aren't for a variety of other reasons.

Then again, the pie chart is what it is. My fear is what may happen down the road in a few years if the first-time buyers turn out to have the financial trend history of many homeowners who defaulted on loans. It hasn't been just those with poor credit who are foreclosing. Only time will tell whether or not this recent burst in home-ownership is good or bad.

Those with the other aspects of qualification to get a loan (income, job security,etc) appear to have made what moves they could and utilized this opportunity rather fully.

Good for them.
Another vote for moving on before too many of those without those qualifications find ways to sneak their noses under the tent.

That's completely unfair! I'm sure you have a really nice home and all the finer things in life, but what about the working American? What about those that are poor and in desperate need? "Oh, it's only $8,000 that isn't that much money." If $8,000 is so little to you, pass it on, I'll take it! My husband and I have been separated for 8 months because we couldn't afford a place of our own, and with the extension of the credit we would be able to. I know there are people out there just like us, in really bad financial situations that must feel the same way. Either you've never know the panic of not even having a dollar in your bank account, or you've long since forgotten!

In theory , I don't disagree. However rather than be all or nothing why not phase it out. I.E. Cut the credit in half to $ 4,000 for several months and then eliminate

Sarah, are you under contract now (implying that you otherwise qualify on income, credit, settlement cash, etc) and are now sweating out getting a closing date before Nov 30?

There are more than a few folks out there in this situation that some consideration would be appropriate. But the line still needs to be drawn somewhere and that somewhere was clearly stated.

The larger concern I have is the next wave of foreclosures due during the winter. Perhaps Sarah and her husband will do even better at that time on a short sale.

Actually the point of the first-time buyer credit was to prop up the realty, construction, and banking business, not provide a benefit to house buyers, by supporting housing prices. It has done this and the only reason the extend to continue the support, especially with the huge overhang of pending foreclosures. Of course the problem is that housing prices will probably continue to drop if the support is removed: So either we make it permanent, the desire of the housing industry, or let prices find their own equilibrium sooner rather than later.

Sarah,

If you can't afford a place now because you are $8,000 short, DON'T BUY A HOUSE. If you cannot save up $8,000, I highly doubt your ability to afford to pay your mortgage. I'm sitting on the market and saving money until I can afford it. $8,000 doesn't come out of nowhere. It comes from responsible savers like me subsidizing irresponsible senders like you. Guess what? I'M a working American who is wise with their finances. The $8,000 credit isn't fair to ME.

I think it's not going to be pleasant either way. End the credit and most likely the prices will dip more. Don't end the credit and our national debt will grow even further.

IMHO there are much more efficient and easier ways to help first time home buyers instead of just giving away money.

1) Any credits should be given to TRUE first-time buyers, not some people who haven't owned a home in a couple of years.
2) Instead of a give-away, provide a loan to help with the closing costs. Or, better yet, states and institutions should lower the fees associated with the home sale. Doesn't everyone find them outrageous? "Title examination fee"?
3) Do away with PMI, "front foot assessment" and other rip-offs.

I do agree that if you can't afford a home you shouldn't buy one. But I also sympathize with Sara and others who have been caught in a seemingly endless race to save for a downpayment. The more we save the more expensive the homes get and the more we need for the downpayment (ING already wants 25%, for example). And I am also offended that many call $8K "peanuts" and "change". Can you spare me some "change"? And for some of us this money could easily be exactly the push that we need.

Not everyone is DINK with 6 figure income around here, you know.

I like the tax credit as a motivator to potential buyers. I hope it's around when I buy in a few months. I like lower interest rates and lower home prices more, though. If my mortgage payments were lower I'd save more and also spend more often. I live in the San Francisco bay area and I couldn't see myself purchasing a nice home in a nice area with prices back about 3-5 years ago. So I am ok with having an end to the tax credit eventually. I'm more happy with the "normalizing" of home price.

My wife and I graduated from college last year and want to purchase a house asap to take advantage of the $8000 tax credit. However, we have not been able to locate a house that we really love, and we do not feel like rushing into a decision. If the tax credit expires, we foresee the home price will drop further, and hopefully this will offset the $8000 that we did not take advantage of. Hopefully this is a smart move.

I have to agree with another comment. I say reduce the credit but extend it for 6 more months

Bad policy.
Looks like all Obama got is a good will.
This is not much different than rich people set law to write off taxes.

The credit may not be ideal, but it's all we have. The government would be better off trying to keep people in their homes, but I don't see that actually happening.

If we only focus more on reducing the number of sellers rather than increasing the number of buyers we may start to address the issue.

Thank goodness the tax credit is soon expiring. Unfortunately, we may see the real estate market fall a bit. But I just don't think that artificially proping the market up does much good.