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Thursday, 01 July 2010
After a close brush with a deadline that could have impacted tens of thousands of home buyers, the U.S. Congress last night passed an extension of the Home buyer Tax Credit closing deadline.
The extension is included in the Home Buyer Assistance and Improvement Act (H.R. 5623) and will prevent as many as 180,000 home buyers from losing their eligibility for the tax credit through no fault of their own. These households had home purchase contracts pending as of April 30 and had until June 30 to close on their purchases to claim the federal tax credit. Under the legislation that passed last night, these households now have until September 30 to close.
The NATIONAL ASSOCIATION OF REALTORS® supported extension of that closing deadline because buyers are experiencing delays in getting their financing closed. The delays are the result of the large number of transactions that are short sales, which can take a long time to close, and the rush of transactions lenders are processing from buyers submitting contracts before the April 30 contract deadline.
The legislation, which now goes to President Obama for signature, is designed to create a seamless extension of the closing deadline; there will be no gap between June 30 and the date the President signs the bill into law.
NAR worked closely with congressional leaders on both sides of the aisle in supporting lawmakers' passage of the legislation, which the association says will help provide additional stability to real estate markets across the nation.
Separately, the U.S. Senate also last night passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), which extends the National Flood Insurance Program until September 30. This will allow home purchases in the 100-year floodplain to move forward. The House passed the bill last week.
When signed into law by the President, the bill, which will apply retroactively, will cover the lapse period from June 1 to the date of enactment of the extension. Without flood insurance, households buying homes in the 100-year floodplain cannot obtain mortgage financing.
More information on both pieces of legislation is at REALTOR.org.
Source: NAR http://www.realtor.org/RMODaily.nsf/pages/News2010070101?OpenDocument
Saturday, 27 March 2010
A recent report from the National Association of Realtors shows that existing home sales dipped slightly in February, partially due to winter storms.
Existing home sales went down 0.6 percent across the nation. At an annual rate, existing home sales were reported at 5.02 million for February, compared to the 5.05 million reported during the first month of the year.
Though sales were down on a month-to-month basis, they were still up 7 percent when compared to levels seen in February 2008. Lawrence Yun, chief economist for the NAR, said that the decline in February was partially attributable to the rough weather seen in a number of areas in the country.
And though sales were up on a year-to-year basis and housing prices appear to be stabilizing, Yun said that a recovery in the industry is still "fragile at the moment."
One key may be a government tax credit that gives first time homebuyers up to $8,000 for the purchase of a property. The credit can also be received by repeat purchasers, though the cap on it is $6,500.
In order to take advantage of the credit, consumers must come to an agreement on a home purchase by April 30 and close by the end of June.
"If we see a surge in home buying comparable to last fall in the months leading up to the original tax credit deadline, then enough inventory should be absorbed to ensure a broad home price stabilization," Yun said.
Another factor that could play into the housing recovery is how mortgage rates react to the end of a Federal Reserve Board program that purchased mortgage-backed securities. The end of that effort comes as March closes, with some analysts thinking it will lead to an increased in home loan rates.
Source: http://www.credit.com/news/housing-market/2010-03-25/tax-credit-for-first-time-homebuyers-could-prove-important-as-sales-decline-in-february.html
Friday, 19 March 2010
Realtors cite federal tax credit, very low interest rate.
The $6,500 federal tax credit for home-owners buying their next home is being credited for part of the upward movement in house prices in Vanderburgh and surrounding counties.
According to a report by the Evansville Area Association of Realtors, the sale price of single-family homes in Vanderburgh, Warrick, Posey and Gibson counties in January and February increased by 13.5 percent over the same period last year.
Chris Dickson, the association's president-elect, said he believes the tax credit brought out buyers for homes in the range of $150,000 to $250,000.
"There are more buyers in the market looking to take advantage of the federal tax incentives," said Dickson.
"The fact that average sale prices in 2010 are starting out strong, compared to 2009, also shows that the housing market in this area continues to rebound."
Dickson also attributed the increase in part to mortgage rates that remain at historic lows.
Bob Reid, president of the Realtors association, agreed.
He predicted March and April also will be strong as the April 30 deadline nears for the expiration of the $6,500 tax credit and for the $8,000 federal tax credit for first-time home buyers.
"There's been no discussion about extending the credits," Reid said.
According to Reid, a person must sign a contract agreement to buy a house by April 30 and must close on the house purchase by June 30 to be eligible for the tax credits.
In January and February this year, the average house sale price in the four counties was $126,282, up from $111,603 in the same two months in 2009, according to the association report.
In Vanderburgh County, the average sale price for the two months rose 7.7 percent to $104,380.
The price was $96,849 for the same period in 2009.
Dickson said Warrick County had the biggest increase, rising by 15.59 percent to $186,818, compared with $161,148 in 2009.
The number of homes sold in the four-county area remained about the same: 341 sold the past two months compared with 343 for the same period last year.
The number of days it took to sell a house on average was 100 in January and February, compared with 110 in 2009.
Because of the increase in the average sale price, the overall volume rose 12.8 percent with more than $43.1 million in homes sold in January and February, compared with $38.2 million last January and February.
"Unfortunately," Dickson said, "many sellers are under the mistaken impression that the market is poor, so they are hesitant to put their homes on the market."
As a result, the number of homes available to buyers dropped to its lowest level in over two years, according to Dickson.
"We need more homes on the market to supply the buyer demand. ... Homes that are in good condition and priced well are selling."
Source: http://www.courierpress.com/news/2010/mar/17/area-home-prices-on-the-rise/
Sunday, 21 February 2010
The first-time homebuyers' tax credit, along with low interest rates and home prices, may have led to builders feeling a bit better about the market for new, single-family homes.
According to the latest National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence increased to 17 in February, up from the 15 reported through the index in January.
NAHB chairman Bob Jones said that a variety of factors, including the tax credit made available to first-time homebuyers, makes it attractive for consumers to buy homes at this time.
"As a result, builders are slightly more optimistic that the housing recovery is finally beginning to take root," Jones said.
Through the tax credit, first-time homebuyers have an $8,000 incentive to purchase a home, provided they sign a contract for the home by April 30. If they do so, prospective homeowners have until June 30 to complete the purchase.
Along with first-time homebuyers, the tax credit was expanded last year to include people who are purchasing a new permanent residence. Those buyers may qualify for a tax credit of $6,500, provided they sign by April 30.
Though the index did increase in February, it is still far from a level that might indicate more wide-spread confidence in the housing market. To calculate the index, builders are asked to rate both current and expected sales of single-family homes, while also being asked to gauge the amount of traffic they are getting from potential buyers.
A reading on the scale above 50 means that the number of builders who see conditions as "good" outpaced the number who see them as "poor." Though the index is still below 50, the 17 posted in February is the highest mark seen on the index since November 2009.
Source: http://www.credit.com/news/housing-market/2010-02-17/credit-for-first-time-homebuyers-helps-improve-builder-confidence-in-home-sales.html
Tuesday, 17 November 2009
Take a close, hard look at the new $6,500 federal tax credit for "move up" home buyers that passed the Senate and House last week. Though it's been getting second billing to the original $8,000 credit for first-time purchasers -- now extended by Congress through June 30 -- the $6,500 credit for current homeowners just might have your name on it.
How does it work? When will it be available?
First things first: The new credit is available now. It took effect Nov. 6, the day President Obama signed the legislation. This means that if you fit the key criteria -- you've owned and resided in your current home for a consecutive five out of the past eight years, and your adjusted household income doesn't exceed $125,000 if you file taxes singly, $225,000 if you are married filing jointly -- you can claim the credit as soon as you close on a qualifying home.
That could be next week, next month or next spring. There is no actual move-up requirement in the new credit. In fact, homeowners who plan to downsize may prove to be significant users of the credit, along with people who are relocating because of employment changes.
If you fit the criteria and are considering buying another home sometime in the coming year, you might want to speed up the process and sign a contract by April 30 and close by the June 30 expiration date. Think of it this way: If the government is willing to give you $6,500 to act a little faster than you had originally planned, hey, why not?
Some other key features of the $6,500 credit:
-- Whatever you intend to purchase, the home cannot cost more than $800,000.
-- The replacement home must become your main residence. There is no requirement in the legislation that you sell your current home. You could rent it out, turn it into a second home or list it for sale later in 2010 when prices might be higher. If you plan to retain it, however, make sure you move into the new house on the day you close so that there is no question it was your principal residence at that time.
-- Like the first-time-buyer credit, the $6,500 version permits a broad range of dwelling types for your purchase. These include newly constructed or existing single-family homes, condominiums, manufactured or mobile homes, and boats that function as your principal residence. You cannot claim the credit if you are buying a second home or an investment property.
-- The Internal Revenue Service is required by Congress to scrutinize claims -- both the $6,500 and the $8,000 variety -- far more closely in the coming months than it did earlier this year. This is because federal investigators have documented significant instances of fraud -- supposed home buyers who were actually minors as young as 4 and fabricated sales. Investigators also found numerous cases of technical violations, such as purchase transactions among immediate family members, which are prohibited.
The revised rules require taxpayers to submit copies of their settlement statements (HUD-1 forms), along with their requests for credits using IRS Form 5405. Congress's new rules also prohibit minors and those who are dependents on another taxpayer's filings from claiming the credit.
-- Home buyers who go to closing between Nov. 6 and Dec. 31 can claim the $6,500 credit on their 2009 federal tax returns or amend their 2008 returns. Similarly, eligible purchasers in 2010 will be able to file for the credit on their 2009 or 2010 returns.
Talk to your tax adviser regarding timing, which may be affected by your household income applicable to a given year.
If you aren't sure whether you can make the deadlines established for the new credit -- a binding contract by April 30 and a settlement by June 30 -- do not assume that Congress will provide another extension. All the political and budgetary signs point the other way, and some of the primary authors of the credit insist that this is it -- no more extensions next year. Take them at their word.
For an excellent consumer resource with frequently asked questions on both the credits, go to http://www.federalhousingtaxcredit.com, which is sponsored by the National Association of Home Builders.
Source: http://www.washingtonpost.com/wp-dyn/content/article/2009/11/12/AR2009111211347.html
Saturday, 07 November 2009
Expected to contribute approximately $22 billion to the economy, Congress overwhelmingly passed a bipartisan measure this week extending the $8,000 home buyer tax credit to April 30, 2010.
The legislation, which is part of a larger bill that also extends unemployment benefits, was signed into law by President Obama today.
More people are now eligible to take advantage of the law, which includes a $6,500 tax credit for buyers who are current home owners and have lived in their home for five of the past eight years.
Income limits for eligible home buyers were also expanded to $125,000 for single buyers and $225,000 for couples, up from $75,000 for individuals and $150,000 for couples. Qualifying home prices are capped at $800,000.
NAR's Government Affairs Division has compiled facts on the changes made to the current tax credit. NAR members sent more than 500,000 letters to leaders in Congress and made nearly 13,000 telephone calls to Senate offices last weekend to encourage support. So far this year, REALTORS® have spent nearly $14 million lobbying Congress, according to federal campaign finance records compiled by the Center for Responsive Politics.
Sen. Johnny Isakson, a Georgia Republican and a former member of NAR, was key in extending the credit, as well as pushing it through initially. Other prominent boosters include the National Association of Homebuilders and the Mortgage Bankers Association.
Listen to NAR President Charles McMillan's podcast announcement.
NAR economists estimate that approximately 2 million people will take advantage of the tax credit this year.
Sources: NAR and The Associated Press, Julie Hirschfeld Davis (11/06/2009)
Monday, 24 August 2009
Bills to extend the maximum $8,000 tax credit for first-time home buyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.
Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.
Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, "It's something we can get done."
Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.
Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)
Source: http://www.realtor.org/RMODaily.nsf/pages/News2009082401?OpenDocument
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