NEW YORK (CNNMoney.com) – While momentum is building on Capitol Hill to extend the $8,000 first-time homebuyer credit, President Obama's housing secretary said Tuesday the administration has not decided whether to support its expansion.
Housing Secretary Shaun Donovan told the Senate Banking Committee that the administration wanted more time to better assess the cost of the credit, which expires on Nov. 30.
"Within a few weeks we'll have sufficient data to get to a conclusion on this," Donovan said. "It's a question of understanding more fully the costs to the taxpayer."
He said there is "clear evidence" the credit has had some positive benefits and that its expiration could have "some negative implications" for the housing market.
At the same time, Donovan said that the end of the credit would not be "catastrophic" because of other actions the government is taking to support the flagging housing market. Interest rates are being kept low and the Federal Housing Administration is playing a more prominent role in lending to homebuyers.
But lawmakers pushing to extend the credit are concerned the housing market is going "to die a sudden death" after Nov. 30, as Sen. Johnny Isakson, R-Ga., said Tuesday.
Isakson and other supporters believe that keeping the credit in place
could further boost home sales, stabilize housing prices and generate jobs.
Isakson and Senate Banking Chairman Christopher Dodd, D-Conn., have co-sponsored an amendment that would extend the credit until the end of June 2010 and be available to single filers making up to $150,000 and joint filers making up to $300,000. Currently the credit is limited to homebuyers who haven't owned a home for the past three years, who make half those amounts and who close on their purchases by Nov. 30.
Whether or not the credit is extended, forecasters are expecting further price declines in many markets due to rising foreclosure and unemployment rates in 2010. Supporters of extending the credit believe it could help mute those price declines.
Opponents say extending and expanding the credit would be a waste of money and only temporarily stave off further price declines.
When asked whether he thought the credit was spurring confidence or artificially inflating prices, Donovan told lawmakers he believes: "Given the decline we've been through, the likelihood that the credit is inflating the market beyond where it would be is very low."
Yeah, wasn't this the very same policy of using a pulse to qualify for a home loan exactly what got us into the current economic woes?
And wasn't it Christopher "Real Slim Shady" Dodd who gave us the Fannie/Freddie Mess?
Look, if you have to resort to financial yoga to contort your way into qualifying for a home loan, maybe renting is a better option for you.
Home ownership is NOT a right, in spite of what ACORN, the CRA, GWB and BHO think.
I am begining to join the crowd that feels studying an issue is critical to make a good decision, but also feels that we need to start making some concrete decisions. Progress is needed now more than ever. Be studious, be fair, be decisive, be taking care of business in a reasonably short period of time!
Congress needs to stop mandating everything, they can't even mandate their own spending for campaigns. But in this case, i am building a house and would like this tax credit. I am putting money into the economy, putting people to work. I'd rather get the money than give handouts to people that don't work.
Here is some of MY hard-earned money for a) YOUR house, b) YOUR new car, c) YOUR heathcare, d) YOUR retirement and the list goes on. I am SICK of the government taking MY money and giving it to other irresponsible people who will not take care of themselves. I don't mind giving to people who truly need help, BUT ENOUGH IS ENOUGH! Obama – YOU WILL NOT be getting a second term in office.
Yes it was stupid to let people with little ability to pay buy homes that they couldn't afford. If that was all there was to it, we'd have a bunch of forclosures and a bunch of sorry banks. But that wasn't the whole story. What nearly brought down the entire world economy was a bunch of Wall Street types who should have known better bundling said shady mortgages into collateralized debt obligations without having the reserved capital to back them. Then these rocket surgeons started short selling them for short term gains as they collapsed. Meanwhile regulators (who went to the same schools and came up through the same firms as the aforementioned rocket surgeons) looked the other way when they should have been doing their jobs. Unregulated capitalism at its finest. Have a nice day!
P.S. Ayn Rand is still an idiot.
While this is a big incentive to first time buyers, its time and usefull ness has probably come to an end. If the housing market continues to flounder however, next year it may be necessary to incentivize again, but now it would probably be better to allow the market forces to work on their own for awhile.
This is a waste of money. Home prices are already way down and a good deal. There is no need for the government to waste tax payer money making it an even better deal. How stupid and wasteful are the Democrats? Obama and the Dems are just not happy unless they are wasting tax payer money adding to the deficits. Makes you wonder what their agenda really is. Do they want to bankrupt America? Or are they just that stupid?
Oh, please make it stop!!!!!!!!!!!! I want to get off this train wreck!
Enough with the giveways! How about some legitimate job creation so people can use their own money to buy houses? And I don't mean feeding the already engorged bureacracy with new bodies! I, for one am tired of being one of the worker bees who pays her bills, her taxes and plays by the rules only to see the government throwing away my money at every whim that hits them.
My wife and I are able to buy a house because of this tax credit. That means instead of wasting money on a rental, we are building equity, and everyone knows saving money and building equity are the two fastest ways to success...which ultimately spreads to others and creates a healthy economy.
So I support extending this program, or at least changing the rule so an offer has to be in by Nov. 30 but closing date is irrelevant. After all, people are no longer making offers on short sales because they take too long to close to meet the deadline. And moving short sales should be one of the main tasks of housing recovery.
Obama needs to do more, Give Up The Promised Jobs instead of LIEING.
Also, Obama cannot stop blaming Bush, because if he does, He has no one to BLAME but Obama himself for the problems that Obama himself made.
More cash for people who can't afford houses. Get ready for multi-trillion stimulus two everybody. Better start learning Mandarin too.
Just so some of you know this. This plan was around last year. The only difference is Obama raised it 500 bucks. In one week I will close on my new condo and I will be able to recieve this. It is there for any first time home buyer and has been there for a while.
And with all the hoops you have to jump through now to get a loan you deserve this money. Trust me the deadbeats that caused this mess have no way of getting a loan now to exploit this.
If they must give away more money I think that those of us with a mortgage should get $8000 off too. Make it an equal opportunity giveaway. Why should only those buying homes get the credit? Most people lost at least 8 grand in the value of their house. I actually don't believe anyone should get this deal, but if you must give it away give it to everyone. I am sure when our taxes are raised to pay for all these stimulus bills, they will apply to everyone.
I don't know, but I can tell you that I enjoyed the weatherization tax credit. We bought new energy efficient windows, and I'm looking forward lower heating costs this winter and to the credit come tax day.
Ignore the selfish people who do not understand the boon this program has been to the economy and the housing market and please extend it.
I don't reakky get this- I understand it will give incentives to those trying to buy a house to buy now, but why does someone with money to buy a house need that kind of help or incentive?
Low pricing, easy negotiating and low interest rates are incentive enough.
At least with Cash for Clunkers you got some oil using vehicles off the road while rewarding poeple with money.
How about a cash back check to Americans earning under 30K?
We cant buy cars or homes and certianly cant afford health Insurance. Give me 12K and I'll stimulate the economy of retailers(clothing- bought nothing new in 18 months), SuperMarkets ( food- get by on every little these day) and Pharmacies( prescriptions I no longer can afford to take)
No decison on sending troops, No decison on extending first time home buyer benefits. He needs help. Somebody get him a magic 8 ball.
With Obama NO decision is better than his quick throw the money away decisions. Please STOP the spending of money we don't have.
"Sufficient data" in government lingo means they have NO idea what it will really cost. Congress made sure of it!
The cofers are already empty yet they keep returning for more.
What a way to run things.
The "Obama Change Express" leaves us with "pennies" and not enough of those to call it "change!: How sad!
Throw more money out to the people that can't afford a home again Obummie. You have to be economically stupid or the biggest socialist I know. We are tired of bailing out government giveaways.