Homebuyer tax credits claimed so far: $23.5 billion
About 3.3 million Americans have claimed federal homebuyer tax credits so far -- $23.5 billion in all, including the 2008 incentive that must be paid back.
In Maryland, about 57,000 buyers have claimed $410 million in credits. That accounts for practically half the 120,000 homes sold through the multiple-listing service in Maryland from April 2008 -- when the program kicked off -- through July. (This assumes, of course, that each claim accounts for one home. There are legal and illegal reasons why it might not be one-to-one.)
The credit statistics, released by the U.S. Government Accountability Office, are a tally of claims made through the beginning of July. So it's not the grand total yet, but it offers an intriguing snapshot of the credit's popularity and cost.
For instance: There might be a whole lot more homeowners than prospective first-time buyers, but many more first-timers got the $8,000 incentive than repeat buyers opting for the $6,500 credit. About 200,000 Americans claimed the smaller credit since it was made available in November, compared with about 400,000 who got the first-time buyer credit during the same period.
It was even more stark a difference in Maryland, the GAO says.
More than 8,300 Marylanders have claimed the first-time buyer credit under the new rules instituted in November. Repeat buyers? About 2,700. (Not all repeat buyers qualify. You had to be moving from a home you owned for at least five years of the past eight.)
That's about $80 million in claimed credits between the two groups.
By comparison, about 18,600 Marylanders claimed $127 million in credits for purchases made between April and December 2008, when the program was a no-interest loan of up to $7,500. Unless a lot of claims are waiting to be processed by the IRS or a bunch of homeowners plan to make their claims with their tax returns next year, that means the "loan" credit -- widely considered a non-starter -- was used by more buyers than the credit in its final iteration.
The January through November 2009 version -- up to $8,000 that didn't have to be paid back, available to first-timers but not repeat buyers -- was claimed by 27,000 Marylanders for a total of $203 million.
Was it worth the cost in foregone revenue? Do you think there ought to be a fourth sequel?
The way that HUD Secretary Shaun Donovan answered a CNN journalist's question a week and a half ago made some buyers think another credit could be in the offing, primarily because he didn't say "absolutely not." I checked in with HUD yesterday, looking for more clarity. A spokesman said there was no news to report about the credit.
The Treasury Department, meanwhile, pointed me to White House Press Secretary Robert Gibbs' answer last week to a similar question. "While I have not seen, obviously, a final list, ... I think bringing that back is not on -- is not as high on the list as many other things are," he said.
Not that this exactly clears this up, I know.
UPDATE -- HUD had this to add today about the chatter over a homebuyer tax credit part four:
"As White House Press Secretary Robert Gibbs said, that's not at the top of anyone's list right now," said HUD spokesman Lemar C. Wooley. "We will continue to be watching the housing market very closely. Our focus will be to ensure that we are implementing our existing programs successfully, but we'll continue to share new ideas on additional steps we can take to help the housing market improve."
Categories: First-time buyer tax credit, Repeat buyer tax credit
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Comments
Do you think there ought to be a fourth sequel?
If you are going to give away my money despite my objections at least do it right. Give EVERYONE 8k. Dont tie it to buying an overpriced home. Tie it to paying down debt. Anyone that accepts, must be forbidden from making credit card purchases or personal loans for 3 years. If you have no debt to pay down, then you get double the amt in cash for not being apart of the problem that crippled this country's economy.
Also, pass legislation that mandates that if you have a child with no means (job) to support it then you will be placed on abstinance island (all female or all male).
This way you are no longer a threat to the overburdened welfare systems. I am talking to you Bulletmore, Murderland.
Posted by: Anonymous | September 8, 2010 9:05 AM
Do you think there ought to be a fourth sequel?
NO! This is the definition of INSANITY!
Posted by: ironhide196 | September 8, 2010 11:50 AM
Even though the home buyer tax credit pushed some people to buy new homes, it was far from what's needed to correct the real estate market.
Posted by: Florida Mortgage | September 8, 2010 5:22 PM
what a waste
Posted by: Darwin Rules | September 8, 2010 8:25 PM
Wasteful program, that put money into the pockets of RE agents for selling at inflated prices (market still needs to drop a little in most places, if not a lot in some places).
The other thing is, you only get 8k if you buy a 400k house. The amount of the tax credit is tied to the price of the house. In other words, buyers who are more RESPONSIBLE and don't go for the biggest house with all the bells and whistles are punished, because they only get 3k, 4k, whatever.
There is a glut of housing out there. Lots of properties still awaiting foreclosure or strategic default. Many potential buyers are unsure of their job situation or they credit scores. Dangling this carrot is irresponsible, it just postpones the eventual evening-out of the market, which will happen when sellers and buyers start coalescing around real prices, which are based on underlying economic data like unemployment rates, median salaries, taxes, etc.
I'm 28 and looking to buy in the city, in the neighborhood where we live right now. I can tell you for a fact that sellers still haven't lowered prices enough and, if programs like the credits keep artificially inflating the system, prices won't accurately reflect the underlying values. This is a lose-lose situation for the neighborhoods and the country, because instead of stabilizing things, it just kicks the can down the road. Buying a house should not be about some one-time tax credit! It should be a reflective decision based on one's stability, one's need for a place to live (married, family, close to work, etc), and the ability to pay! A one-time tax credit does NOTHING. It doesn't create real change, it just helps RE agents toot their horns (irresponsibly, I might add).
Heck no, we do not need another tax credit!!!
Posted by: Anonymous | September 9, 2010 2:58 AM
Has anyone seen the new Remax spot? They actually played it like they had nothing to do with the mess. "Too many home buyers locked out of home buying because of an overheated market."
Yeah the overheated market they HELPED create.
Posted by: ironhide196 | September 9, 2010 10:50 AM
Anonymous, where did you get the idea that you had to buy a $400k house to get the full $8k? It's 10% of the purchase price up to $8k, which by my math means a $80k house.
I just bought my first house, in the city, at age 28. None of that money went to RE agents (it was FSBO).
Posted by: BC | September 13, 2010 12:08 PM
I agree with others, this is a waste of money!
Posted by: Philippine Real Estate | December 1, 2010 3:25 AM
Please, no sequel, no more subsidies for home buying. Let the system work itself out. It will take a long time, but it will only be delayed by throwing around money to get people to "hurry up and buy" at the wrong prices, for the wrong reasons.
Posted by: chappy10 | December 2, 2010 1:46 PM
We bought a house in June 08' and received the 7500.00 first time home buyers credit- and a couple of weeks ago we received a letter from the IRS stating that we could ammend our 08' tax return for the other 500.00 dollars ( making it the 8000.00)- my question is should I take the 500.00 credit or is it just money I am going to have to repay anyway? We have been living here since June 08 with no plans of moving.
Posted by: Homebuyers tax credit | January 17, 2011 11:59 PM
Homebuyers tax credit, I'm perplexed -- $7,500 is the maximum credit for people who bought in 2008. See here: http://www.irs.gov/newsroom/article/0,,id=206292,00.html
Are you sure that letter was from the IRS?
Posted by: Jamie Smith Hopkins | January 18, 2011 6:30 AM