As a homeowner, I'd like to see it stay, obviously as it spurs home sales, however, the market *has* to be allowed to return to normal.

Do we keep it forever or do we allow the invisible hand to get back to work?

No, you can't extend it. The market has already been artificially re-inflated by enacting the tax credit with subsidized mortgage rates. Time to let the free market get back to work. Propping up home prices is not what anyone should want. People who bought during the peak made a financial decision. They have to live with their lost phantom equity. If they are underwater, walk away and make a business decision. We need prices to go down and interest rates to go up.

Also, this tax credit is taking revenue away from the government. With record deficit spending, this tax credit should end so we can start balancing the budget. Giving away free money and entitlement programs is not how the system should be. Housing is not a right, it is a privilege. People who are buying because of the tax credit will find out later they are making a mistake. Just as the down payment assistance programs from during the bubble years proved to have high default rates, it would not surprise me to see more FHA loans go into default who put down 3.5% and took advantage of the 8k credit.

The sad truth is that housing prices still have plenty of room to drop. Bank of America announced recently they will increase their monthly foreclosure filings from 7,500 to 45,000 nationwide. They have 1.2 MILLION defaults and won't even get to them all this year. What is going to happen when you have other banks in a similar predicament? This program is just like cash for clunkers. People lined up to take advantage of the program, but when it ended, demand dropped dramatically. The same will happen for housing. There will be less incentive to buy a home when this credit expires. With rising interest rates, it will only compound the problem, especially when supply of homes from shadow inventory will begin to flood the market.

I guess if you say the market has hit bottom enough times, people will begin to believe it. But at some point, reality will set in. People will soon realize that they thought they bought at the bottom when in fact they did not. You also have to take into account the pending Cap and Trade legislation that will cripple home prices further. This will require all homes be inspected to meet new "green energy" guidelines. You will have to have an energy rating on your home and must have repairs done in order to sell.

If you had to get a license to sell your home, would you buy right now? This Bill has already passed the House and will be up to the Senate soon. Cap and Trade is on the agenda...

http://www.federalobserver.com/2009/10/01/thinking-about-selling-your-house-a-look-at-h-r-2454-cap-and-trade-bill/

I agree with Jelena; there are several houses in my neighborhood alone that have come back on the market and while they're listed lower than they were last year, they're still overpriced (sometimes hideously so). I'll admit that I took advantage of the credit, but I was looking to buy a home anyway; I worry that extending the program will encourage people who really aren't ready to buy to jump into the market, only to find themselves underwater when the credit DOES expire and the housing market can finally balance itself.

Extend and pretend must end

I have a feeling people who lowered their price last year and sold for a loss are going to consider themselves lucky when they see what happens to sellers after the credit ends. I'm looking for a home now and will not even start making offers until the credit ends. I don't qualify but will still use it to my advantage.

There's also a regressive component to this tax credit, just as there was for Cash for Clunkers. Anyone able to buy a new house or car is inherently in better financial shape than many others. Tax policy like this serves to redistribute wealth upwards by shifting the leftover tax burden downwards onto those who can't afford a new car or house.

Leaning toward the side of saying "No", they should not be extended... but if they are, they should include a phaseout over the next 6 months.... say, starts at $6,000... drops to $4,000 in 60 days... then to $2,000 in 120 days... or something like that....

It'll be interesting to see what happens to the housing market after April 30. I wouldn't be surprised to see another big dip.

yeah, this is real great. I spent the last 6 months getting ready to build but could not move ahead because of seasonal weight restrictions. Now I cant break ground till the end of april. No way will I have an occupancy permit by june 30th. So I create jobs, but get no benefit. Not to happy about that. Ill make the 8 g's another way, but the point is I would not have went this route If i didnt think that it would be extended.

they really want to get houses selling make it higher to $15,000 for everyone!!!! We need it

For someone who owns 1 and only 1 property which is in a foreign country and now wants to buy a house in the US, does he qualify as a first time home buyer to receive the $8000 tax rebate? I'm considering purchasing a home around Baltimore so I was wondering if I'd qualify. Although it would be after April 30 so this may be a moot question! Thanks.

You're right, Matt, it would be a moot point if you don't sign a contract by April 30.

But timing aside, you aren't disqualified for owning a home on foreign soil: "A taxpayer who owned a principal residence outside of the United States within the last three years is not disqualified from taking the credit for a purchase within the United States," the IRS says.

Does anyone else expect prices to crater in much of Baltimore city once the credits expire? Unfortunately, I think this is likely.

EXTEND THE CREDIT!!!!!!!! AS A FIRST TIME BUYER I HAVE BEEN DELAYED BY ALL SORTS OF THINGS AND A SHORT EXTENSION WOULD BE GREAT WHILE I FINISH JUMPING THROUGH THE FIREY HOOPS MY BANK HAS GIVEN ME

Prices should only drop about the value of the subsidy. So about $5,000-$10,000

Extend and reduce throughout the summer and fall. Swapping horses in mid stream can lead to drowning.

The credit should be extended. As the economy improves,so should housing market. The credit will help get us over these rough spots in the down economy.

I started the process of building my own home on my own land in February. There is no way I'll be done June 31. Too many hurdles (bankers, lawyers, insurance agents, etc..) They need to allow for completion of all home under contract before April 30. Claim when completed.

A better time to end the tax credit would be October or November 30. The market takes a natural downturn at that time and could find an equilibrium before the next spring market occurs. If at that time interest rates are still historically low, perhaps the impact would not be too great. Especially if the stock market remains optimistic and the jobless rate declines. There would be a negative psychological impact not to extend through fall that could produce an effect greater than the situation should reasonably develop. Should the real estate market take a precipitous tumble, more home owners would simply walk away from underwater properties and that could produce an unstoppable downward spiral.

As a previous homeowner who suffered the loss of a home, and had to reestablish my bank account, I say enough of the "tax credit to 1st time home buyers! I dont stand a chance to purchase a home at a great deal! All the freeloaders are getting the breaks! I have struggled just as hard economically, but my credit doesnt allow these kinds of breaks!!! Enough of this tax credit BS! I cant even get a LC, because the sellers are more opt to go wih a "tax credit deal!"
What is going on here, is no different than what the banks did te past 7 years, giving mortgages out too those who couldnt afford them to begin with!

I read here - http://www.savingtoinvest.com/2009/02/15000-first-home-buyer-tax-credit-in.html - here that congress and realtors group are looking at this issue. Do you think anything will be decided soon? I am in the market for a house and would like to know if I can delay the purchase. Very little info available.

Gail, I've heard little talk of an extension -- and in fact, the piece you reference makes the same point. If one is in the wings, decision-makers are keeping it very close to the vest. The National Association of Realtors -- officially at least -- says it is not lobbying for an extension.

I've said this before, but to all those rushing to buy before the credit is due to end: Make sure you're actually comfortable with your purchase. Don't buy just to get the credit.

My son just put in an offer on a condo. If it gets accepted, and he can get the inspection done and meet with his attorney to get the P$S signed right away, he could possibly be under contract by next week, before 4/30, but it is going to be very close and stressful. His realtor said that in Massachusetts, you only need an accepted offer to purchase, not a signed P&S by 4/30 to qualify...I haven't been able to find any reference to that It is going to take a lot of stressful, pushing to get under contract by next week, so if just having an accepted offer is good enough to qualify for the tax credit it would be great. Any one know if that is in fact true.

Extend the credit until December. The summer months are when people usually starts buying homes not the winter. Just when they can start back looking, the extension expires. It wasn't enough time..

Janet, I'm sorry, I don't know the difference between rules in Massachusetts and Maryland.

Debbie, spring is traditionally the big buying season. Around Baltimore, contract signing starts picking up in January and rises from there until April or May. (Sales can take a month or more to close, though, so it takes a while for those numbers to appear as actual sales.)

I waited many years for the right time to buy a house. When the opporunity presented itself the governement intterupted the market correction to artificially prop up housing prices. Real Estate in this area for a radius of 50 miles is terribly overpriced. Brick houses that sold for 180K in 2005 and built in the 1960's are selling for $300 - 500K. Paneling is nailed right to the 2X4 and theres no wall behind the paneling. Amazing what people will buy! I won't buy until all government incentives are removed from the housing market. They ought to get rid of the tax deduction because that's a factor too!

(copied directly from my blog post today...)

As I write, today is April 28th. We officially have today, tomorrow, and the next day as the final days in which folks can take advantage of the about-to-expire homebuyer's tax credit (up $8,000 for first-timers & up to $6,500 for other buyers).

But, here's the rub...in writing an offer on a home these last couple of days that includes inspection and/or financing contingencies, you might end up with a tough choice to make. Should either the inspection or financing not work out as well as you'd hoped, you could be stuck between choosing getting Uncle Sam's cash or being "forced" to accept the home in a non-ideal situation.