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I have heard talk that the first-time home buyer tax credit is likely to be extended for another 6 months (to possibly 12 months).
What is your opinion on this? Do you think it will drive up home prices and interest rates... leaving us exactly where we are now? Or do you think it will give the economy a much-needed bolster?
Here is an article that corroborates what I have heard:
I believe that extending the first time homebuyer tax credit would be a mistake. It would artificially and temporarily slow the correction of house prices, it will add to the national debt for reasons that aren't justified in my opinion, it will tempt people to buy a house when they are not quite financially ready(sound familiar?), and I also believe that many of these will end up in foreclosure in the near future. The tax credit is a government narcotic meant to placate and convince the people that government is doing something good. The money(tax credit) has to come from somewhere and that somewhere is the people through increased taxes. We have reached a stage where too many people drool over and grab at any government giveaway, not realizing nor recognizing that the main impact of these giveaways is the further weakening of the economic and moral fabric of our country.
I believe that extending the first time homebuyer tax credit would be a mistake. It would artificially and temporarily slow the correction of house prices, it will add to the national debt for reasons that aren't justified in my opinion, it will tempt people to buy a house when they are not quite financially ready(sound familiar?), and I also believe that many of these will end up in foreclosure in the near future. The tax credit is a government narcotic meant to placate and convince the people that government is doing something good. The money(tax credit) has to come from somewhere and that somewhere is the people through increased taxes. We have reached a stage where too many people drool over and grab at any government giveaway, not realizing nor recognizing that the main impact of these giveaways is the further weakening of the economic and moral fabric of our country.
I have to agree with you. Because I have seen it first-hand. The first-time home buyers credit (while awesome), has artificially stabilized the housing market and driven home prices right back up. The sad part of it is, the job market is not as stable and people are still losing jobs left and right. And homes... sadly are still going into short sales or foreclosures. The economy (at least in the state of Michigan) is nowhere near stable.
As a first-time home buyer, I actually hope they "don't" extend the credit. Because people are in a frenzy around here to close on homes (any homes) just to get the tax credit. It's like instant gratification (unless they put the money toward something useful like paying down their credit cards). And really... what is the lesson?
I understand the premise behind it. They want people to trust the banks and to invest in a time where many people are still holding tight their purse strings. They want to look like a government of the people. But in my honest opinion, the government has been way out of touch with the people for some time now.
I support it. The housing market plays a very important role in stabilizing the economy. People will always lose jobs; it is an unfortunate part of life. I wish someone could have given me $8000 when I bought my home. The banks have come back to their senses. You need to have good credit to get a loan these days. People who have very good credit are usually mindful of their debt to income ratio. If you manage your finances properly, you can weather the storm during the tough times. You can't do that if have $50,000 in credit card debt, a $500 per month car loan and zero savings.
I am against taking my or your money and giving it to someone else. Just like the Cash for Clunkers on cars, it is a feel good tax by the Govt that overall does not make that big of a difference.
If they do extend it it should be a graduated credit. Start out at $4k and reduce it $500 every 2 months.
The overall effect in a year will still be negligible.
For the record I had at least 4 1st time buyers this year who qualify. They were buying anyway but got a nice chunk of your money.
I am against taking my or your money and giving it to someone else. Just like the Cash for Clunkers on cars, it is a feel good tax by the Govt that overall does not make that big of a difference.
If they do extend it it should be a graduated credit. Start out at $4k and reduce it $500 every 2 months.
The overall effect in a year will still be negligible.
For the record I had at least 4 1st time buyers this year who qualify. They were buying anyway but got a nice chunk of your money.
I'm with you on this. The $8K tax credit just makes it a feel good "cash rebate" by the government but it's coming out of taxpayers money. The government is robbing from one party to give back to another party
First they estimated the $8K tax credit would cost $6-7 billion when it was passed. Now it's estimated the tax credit will end up costing the government $10 billion. And they want to extend the tax credit to increased the trillion the US owes? Plus instead of giving a 15K tax credit to everyone with no income limits, they make a deal with Senator Reid of Nevada to funnel 8 billion for the rail project from Las Vegas to Los Angeles.
We are just bleeding money in this country. It's spend, spend, spend. When is it going to stop?
The home tax credit is just a mini stimulus. It helped the low end of the market. But it's a complete waste of money to keep on extending it. People had 7 months to shop for a home if they were truly interested. They just can't extend it for "those on the fence" You can't just turn back the clock. People had more than enough time to take advantage of the tax credit. It's not like interest rates shot up either. People had their chance. Lets move on and not waste more money.
I also hope they don't extend it. I stated in another thread that I would rather see those tax dollars go towards grants for small business startups or something. It would be my preference that someone buy a house because they have a job and can afford it.
Tax payers are not an endless supply of money. Car makers got help, banks got help, and home buyers had their help too. Now I think it's time for small business's/innovative companies to get some incentives for job growth.
I also hope they don't extend it. I stated in another thread that I would rather see those tax dollars go towards grants for small business startups or something. It would be my preference that someone buy a house because they have a job and can afford it.
Tax payers are not an endless supply of money. Car makers got help, banks got help, and home buyers had their help too. Now I think it's time for small business's/innovative companies to get some incentives for job growth.
I think small business start-ups should receive grants too.
I'm looking to buy with cash and I don't qualify for FTBC, so I say end it. Sooner or later, the market will have to stand on its own two feet. People buying with no money down has proven to provide tragedy. Look at the big picture. If people had been required to put 20% down, we would had neither the bubble; nor the bursting of it.
I'm looking to buy with cash and I don't qualify for FTBC, so I say end it. Sooner or later, the market will have to stand on its own two feet. People buying with no money down has proven to provide tragedy. Look at the big picture. If people had been required to put 20% down, we would had neither the bubble; nor the bursting of it.
I do not agree. There are plenty of people who put down less than 20% and are sucessful homeowners. The problem was easy credit. Banks gave people who were not creditworthy loans.
I think it great that you are able to buy a home with cash. Unfortunately, not everyone can do that.
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