The Senate has passed a bill, following the House, to to extend the home buyer tax credit until September 30, 2010. The extension allows home buyers who entered into contracts by April 30, 2010 until the end of September to complete the closing process on their new home. This extension provides some extra breathing room for home buyers who were trying to complete a sale on June 30, 2010.
The home buyer tax credit has been extremely popular, but not without its criticism. Many economists say that home sales were pushed forward to March and April instead of a natural healthy growth through the rest of the year. Sales for homes since tax credit expired have dropped to historic lows due to the artificial increase in sales for the first part of the year leaving a glut of unsold homes on the market. Recovering from the tax credit is expected to take several months. Some home buyers claimed they would back out of deals if the closing date had not been extended.
[AD]More than 2.6 million taxpayers claimed the tax credit through April, totaling $18.7 billion, says the Internal Revenue Service. The National Association of Realtors (NAR) pushed hard for the extension of the home buyer tax credit saying. “These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a workflow jam with lenders or other delays such as lapses in the National Flood Insurance Program, Rural Housing Service, and new home construction, and might not be able to complete the purchase of their homes by the [June 30] deadline. It would be a tragedy for them not to be able to complete the purchase in time to claim the credit,” said NAR President Vicki Cox Golder.
NAR said the following outstanding sales, by state, will be affected by the extension: Alabama, 2,590; Alaska, 830; Arizona, 5,440; Arkansas, 2,090; California, 17,700; Colorado, 3,390; Connecticut, 1,770; Delaware, 400; District of Columbia, 300; Florida, 14,830; Georgia, 6,270; Hawaii, 710; Idaho, 1,270; Illinois, 7,030; Indiana, 3,560; Iowa, 2, 030; Kansas, 1,840; Kentucky, 2,540; Louisiana,1,800; Maine, 840; Maryland, 2,630; Massachusetts, 3,930; Michigan, 6,470; Minnesota, 3,760; Mississippi, 1,530; Missouri, 3,600; Montana, 760; Nebraska, 1,110; Nevada, 3,800; New Hampshire, 690; New Jersey, 4,300; New Mexico, 1,160; New York, 9,190; North Carolina, 4,890; North Dakota, 460; Ohio, 8,510; Oklahoma, 2,760; Oregon, 2,090; Pennsylvania, 5,830; Rhode Island, 500; South Carolina, 2,460; South Dakota, 500; Tennessee, 3,910; Texas, 15,340; Utah, 1,130; Vermont, 400; Virginia, 3,890; Washington, 3,190; West Virginia, 940; Wisconsin, 2,690; and Wyoming, 390.
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