will next year be first-time-homebuyer market too? (sale, foreclosure)

[housetrained]

With the release of most recent jobless statistics does it look like interest rates will slow their recent climb, maybe even decline again into next year? Any idea about whether first-time-homebuyer incentive programs will continue? Will next year also be "THE" do-or-die time for first-time homebuyers?

Thanks.

[nele]

The current $8000 first-time homebuyer tax credit will expire at the end of the year, but I wouldn't be surprised if it was extended. And remember this credit has to be amortized over a period of time (several years).

[2bindenver]

The $8,000 not owned a property for at least 3 years tax credit does not need to be amortized over time, you get the lump sum after you file your taxes, or amend your taxes. The $8,000 expires on December 1st.

Will Congress extend or even modify this? Who knows. There is talk about removing the not owned a property for three years part, and upping the credit to $15,000 -

....anyone have a crystal ball that works?

[bhcompy]

rates will probably drop slightly as the homebuying season ends, or at least thats what i assume since i would assume it follows other market trends, but maybe not

[Jerry Bckr]

From what I'm hearing, interest rates will continue to climb. The thinking is that the government is going to have to have higher rates so investors will continue to finance our out of control deficts. As we print more and more money, investors are dumping dollars and buying Euros and Yens, to name a few, because they feel those currencies are more stable. As we flood the world with dollars, they become less and less enticing. So to entice, we have to raise rates. If congress would put the kabosh on some of these spending plans for the time being, that might bring a sigh of relief to the global investors, because then we wouldn't be having to print as much money as they expect us to as we try to enact all this legislation that we can't afford.
As far as extending the tax credit, who knows? Personally, I hope they don't because it will lead to higher deficits. This present government and their rush to pass anything without really giving it any study, scares me. How about the stimilus bill that no one really read? How about the universal coverage that no one has really studied, or the cap and trade energy tax? It would suprise me if congress extended it, because that's all they know. You can fix anything by throwing more money at it.

[bhcompy]

Originally Posted by Jerry Bckr

As far as extending the tax credit, who knows? Personally, I hope they don't because it will lead to higher deficits.

Unfortunately, affordability is still way out of whack for first time buyers. The same loan I had this time last year(200k FHA) only had around 5k in closing costs, where now I'm paying 9k because the banks are squeezing everyone. And that's not counting that house pricing in many job centers in the US is still too expensive when measured against traditional home affordability calculations. It's really necessary for people like me who make around average wage for the area, but don't have 150k to put down on a traditional loan(I dunno who does, either) because housing is so overpriced compared to average wages. If you didn't buy by 1999, you spent hundreds of thousands more for your home

[Merlander]

My guess is it will be renewed, here's why:

In '08, they offered the $7500 credit that was in reality an interest-free loan.

In '09 they sweetened the deal, and made it a real credit for $8000. They did it because housing needed a boost. A big boost.

In the past week, the news has been that the "green shoots" aren't really so green. Unemployment is still rising, which will probably exacerbate the foreclosure problem. Housing is not really improving [yet].

As a result, I think they will extend the credit into 2010, in a continuing effort to prop up the housing market. I doubt that it will be sweetened any more, though.

[Nav]

The 8k credit is actually hurting the housing market because it discriminates against current home owners wanting to up-size. If the credit were extended to all buyers, then more people would be inclined to buy in the mid priced market, freeing up inventory in the lower end of the housing spectrum. Typical government, exclude those who could really use it and give to those who don't. If the 8k is required just for someone to enter the housing market, then basically they are not ready to enter the market financially. Getting a whole herd of people into low cost housing is not going to help the housing market recover, its just going to plug the hole left by the financially irresponsible and those who have lost their jobs and bought houses well beyond their means.

To fix the housing market, they need to extend the credit to ALL buyers, not just a few newbies.

Nav

[bhcompy]

Originally Posted by Nav

The 8k credit is actually hurting the housing market because it discriminates against current home owners wanting to up-size. If the credit were extended to all buyers, then more people would be inclined to buy in the mid priced market, freeing up inventory in the lower end of the housing spectrum. Typical government, exclude those who could really use it and give to those who don't. If the 8k is required just for someone to enter the housing market, then basically they are not ready to enter the market financially. Getting a whole herd of people into low cost housing is not going to help the housing market recover, its just going to plug the hole left by the financially irresponsible and those who have lost their jobs and bought houses well beyond their means.

To fix the housing market, they need to extend the credit to ALL buyers, not just a few newbies.

Nav

It's people with houses(notably boomers in my exp) that created the run up by using their homes as ATMs and launching points and eating up the market by overbidding with excess equity from their own home sale and eating up lower end properties for rentals. Screw them. Property values are still near/at/over 100% more than they were 10 years ago in my neck of the woods, which is not in line with any inflation you could come up with, because of this crap.

8k helps offset the cost of larger closing cost bills and can also cover much of what you need for an FHA loan. It has nothing to do with financial responsibility and everything to do with housing still being well over what they should be in decent areas of the US because of irresponsible existing homeowners.

[Noahma]

Originally Posted by Nav

The 8k credit is actually hurting the housing market because it discriminates against current home owners wanting to up-size. If the credit were extended to all buyers, then more people would be inclined to buy in the mid priced market, freeing up inventory in the lower end of the housing spectrum. Typical government, exclude those who could really use it and give to those who don't. If the 8k is required just for someone to enter the housing market, then basically they are not ready to enter the market financially. Getting a whole herd of people into low cost housing is not going to help the housing market recover, its just going to plug the hole left by the financially irresponsible and those who have lost their jobs and bought houses well beyond their means.

To fix the housing market, they need to extend the credit to ALL buyers, not just a few newbies.

Nav

in our office, when we had originally heard that they were doing the credit for all buyers, we had a sigh of relief, we figured it would trickle back into us. When we heard they had decided that it would be for first home buyers, we all gasped, and now we are holding our breath again. First time home buyers getting into risky loans were what created the problem, and they decide to give the money to just first time home buyers.