No. No no no no no!

Our nation has existed for over two hundred years without having to bribe people to buy homes. If you have to pay somebody to do something that is already, as NAR would say, "a great financial benefit", then it is either not financially savvy, a waste of taxpayer money, or both.

This will do nothing in the long term for housing, just drive up our national debt. It must DIE.

=)

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October 08

Amanda Alejandro, "realestatexpert1"
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Thank you for your reply klarek..... I think I already knew your answer... I as REA actually and other realtors are going to be mad at me.. Do not think the 8,000 tax credit should be extended. Because It is a stall tactic for the market to stablize quicker. Yes do I think it will stall some sales yes do I think an incentive is a good thing.. Buttttt the incentive is you get to be a homeowner.. And there are great deals out there you just need to know where to look.... You don't need the 8,000

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October 08

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According to the NAR, the tax credit will result in about 20% more sales to first time home buyers. The tax credit is extended to all first time buyers, not just the additional ones. So, take the 120% total, divide by the 100% who were going to buy anyway, times the $8k per buyer, and you get $48k or so cost per additional house purchased. The same money used to increase lending to small businesses would do far more to help the housing market in a more genuine way by increasing employment. However, that effect would be indirect and Congress and the President wouldn't get full credit.
My guess is that it will be extended and perhaps increased. It makes the banks and NAR fund campaigns and makes all those voters happy about getting a check. The other 95% of people who didn't get a check won't really see the money come out of their accounts directly, so most won't notice.

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October 08

Amanda Alejandro, "realestatexpert1"
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LamaSr very well put. I hear that they are asking for 15k now that is just insaneeeeee. I agree with above.

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October 08

NTETS ZDGS 2007, "Caveat Emptor"
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hell, the same money used to pay lender fees so that they could buydown and permanantly fix mort rates for the people who want to keep their home could do a lot more good.

the same money used to employ 400,000 people for 1 year could do a lot more good

the money used to buy new government GM cars/trucks (with a discount since we now own 1/3 of the company, we should be able to purchase wholesale)

using it to shut up the conservatives who prattle on about govt spending is by far the best use however. so no, not extending the credit and not replacing it with a similar program would be ideal.

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October 08

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I would vote no. I think that some local markets are being overheated in entry level housing with the current tax credit and that many of those houses are going to people who can barely qualify (if at all) without the 8K windfall. I do not think that is a good way to build stability in the market moving forward.

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October 08

Amanda Alejandro, "realestatexpert1"
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Ntets well put

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October 08

BMFPitt
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Not only should the bribe be allowed to expire, but the mortgage interest tax deduction should be repealed, Fannie & Freddie should be shut down and the FHA should stop guaranteeing loans.

I don't see why the government should be encouraging (and paying for) home deptorship the way it does.

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October 09

Amanda Alejandro, "realestatexpert1"
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BFMPitt- I disagree there. But thank you for you opinion

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October 09

BMFPitt
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Would you care to explain why you believe that taxpayers should subsidize mortgages? What is the benefit that is gained by this? Why is it justifiable to have renters and non-motgage holders pay for it?

If your answer is entirely based on "owning a home is good" then why are almost all of these giveaways only for those who don't own a property free and clear? (And even the lone exception of the $8k bribe certainly does great harm to cash-only buyers by raising the sales price by far more than it would otherwise be if none of these programs existed.)

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October 09

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IMO, the mortgages associated with the $8k credit will default at rates higher than what we saw with subprime loans. Courtesy of the FHA and the tax credit, we are now back to zero money down lending. The FHA will need a bailout within 1 year from today. After that, Congress will authorize another emergency agency to continue the same model.
With all the news stories of people not paying mortgages for years, I'll bet many will take the tax credit and squat in the house for 2 years without having made a payment.

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October 09

klarek the realist
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The mortgage interest tax deduction should never have existed to begin with. It has literally transferred money that should have gone to pay down our debt (and instead is being made up for by renters) to real estate. This drove up prices and has put a huge long-term increase on our nations cost of living.

Problem is, there is no way to just end it. The impact would be inflationary in the sense that people's monthly costs would skyrocket to the point of paralyzing our economy. Believe me, I'm against any sort of subsidy or enticement to buy, because real estate has gotten completely out of control. Not to mention that it's killing our federal budget. But I can't think of a way to end it now that wouldn't do more damage than is worth it. It's different than buyers bribes and low rates which draw people into the game, then have no impact on them afterward.

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October 09

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Problem is, there is no way to just end it.

It's currently capped at like $1M or something. If you drop that by $50k-100k every year, it would phase out slowly enough that anyone who was counting on it as part of their cost of living would have more than enough time for inflation to make it irrelevant. You could combine that with an even faster limit reduction on loans made after the phase-out was passed, like $250k/year so it'd be gone in 4 years, but without causing a huge rush to buy before the deadline.

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October 09

Amanda Alejandro, "realestatexpert1"
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Did you guys see msn this morning about fha.... check it out I am sure you will find it interesting.

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October 09

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i was under the impression that if you take the deduction, you are required to not default or you would have to pay it back. is this not the case?

also re BMF PITT's statement, i think the govt program should be scaled back but not eliminated. the problem i have with FHA is the idea that people "cannot" put together a reasonable down payment. its silly to think that the only difference between buying and renting is a couple of extra signatures, yet with 2 months rent and a 620 credit score being the only limitations(both are flexible) you end up with people who say "why would you possibly rent when you could be buying" --is that not right miss amanda?

yes people on average wish to buy, but that is an excuse for them to improve their personal habits and raise themselves to being qualified candidates, not an excuse for the govt to come in and subsidize you to buy when you aren't even willing to make home ownership a priority over say buying a new flat screen tv...

as for taxes, i am against taxing assets as a general rule, "having" is not a crime. therefore the govt has no right to tax my shelter(house or apartment) and i will never see any study that says homeowners are going to use resources that renters dont, so the idea that one should get a tax break and not the other is completely unfair. therefore i would rather see the income deduction extended to rents/morts, food and utilities. from there i think 99% of all other deductions should be eliminated.

especially the child credit. it has become an incentive to acquire dependents... its completely backwards.

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October 09

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Did you guys see msn this morning about fha.... check it out I am sure you will find it interesting.

I'm guessing it was something along the lines of this:

The number of F.H.A. mortgage holders in default is 410,916, up 76 percent from a year ago, when 232,864 were in default, according to agency data.

Despite the agency's attempt to outrun its fate by insuring ever-larger amounts of new loans to such borrowers as Ms. Shimon — the current rate is over a billion dollars a day — 7.77 percent of the portfolio is in default, up from 5.6 percent a year ago.

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it.

"I don't think it's a bad thing that the bad loans occurred," he said. "It was an effort to keep prices from falling too fast. That's a policy."

The troubled loans are nevertheless weighing on the agency's capital reserve fund, which has fallen to below its Congressionally mandated minimum of 2 percent, from over 6 percent two years ago.

The quote in bold being something that would get a politician (at the very least) tossed out of office and shunned for life in a more sensible society.

This isn't news to any of us here. We've been saying it for well over a year. In fact, the FHA loans pale in comparison to when Fannie Mae was giving 2nd mortgages on homes already in default in order to fake solvency for a few extra months. That the people behind these programs aren't currently being tried for treason saddens me.

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October 10

Amanda Alejandro, "realestatexpert1"
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"I don't think it's a bad thing that the bad loans occurred," he said. "It was an effort to keep prices from falling too fast. That's a policy

WOW is all I could say to that comment.... horrible

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October 10

Roberto Ribas, "azrob"
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you tell me Amanda, extend or not

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October 10

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I am a ( hopefully) first time buyer. I have been waiting for this bribe to die. I want prices to

"It was an effort to keep prices from falling too fast. That's a policy."

NO!!! I Want prices to fall to where they should be. This bribe was simply a way to stop me from buying anything for awhile longer. I have been trying to save to buy a house. 10 years ago I was $40k off. All the time I saved I saw prices go up to where I was always the same amount behind no matter how much I got ahead.

When house prices go back to (pre-bubble) around 1999-2001 levels I will buy. Not until then. Let prices go back to normal. Let a house be worth $100-125k as it should be. Why make people suffer more who have been responsible living within their means and reward those who were not? Why should the government make a bribe to make even more people act in an irresponsible manner?

For once let inflation be taken away. Let money actually feel like it can buy something again. By removing this perverse incentive and letting priced drop like a stone the bubble will be removed. Things will stabilize as they need to. But not as the people in power want.

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October 10

Amanda Alejandro, "realestatexpert1"
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Roberto..... are you having extend issues... this is about the tax credit not your personal problems... lol... im kidding but you started that one up.

Country_hick thank you for you opinon.

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October 11

klarek the realist
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BMFPitt, good idea on the tax write-off roll-away. Didn't think about that.

And that NYTimes article about Frank and the people getting these ridiculous FHA loans really upset me. They are implementing bubble-like lending standards to people that have already been foreclosed upon, to get them back into the housing market asap and prop up prices. Frank needs to be voted out of office, this has gotten ridiculous.

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October 12

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I'm waiting to buy, and will know it's not time as long as bribes ("incentives") like this are still in effect. The same goes for the 0% Fed rate.

When these supports are removed, house prices will take another big step down.

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October 27

CORONA NICK
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Well, once the 8K tax credit goes away, and rates start to climb, and still no jobs, and even more foreclosures.... prices are going down for 2010.

As far as the OP question, extending it will keep sales numbers up for another several months, after that, it will drop like a rock.

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October 27

Daniel Bretzke , "Bretzke"
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Please extend. It is an incentive for the people who should be buying houses to buy one. The money they save on taxes will probably be spent at Home Depot or Costco.

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October 27

NTETS ZDGS 2007, "Caveat Emptor"
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actually that's not necessarily true, without extending the scope of the payment, actual sales rates should fall regardless. the pool of qualified first time buyers shrinks daily

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October 30

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It is an incentive for the people who should be buying houses to buy one

please explain to me how there can be an imperative statement on consumption(ie should be consuming)

then explain to me why they aren't buying even though they should be.

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October 30

Amanda Alejandro, "realestatexpert1"
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thanks everyone for there opinons here. I am an agent a don't think it should be extended. however the incentive is simple... buying a home is an incentive in itself.. Homeownership for some and most people is an investment for there future. With goverment involvement its only a stall tactic prices have to dropppp for the market to stabalize its just that simple. everyone is oh 8,000 wow... you know how much it costs us as tax payersss alot more than that.... this isn't a good thing in the long run..

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October 31

Jason Bonas, "Jason Bonas"
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I have been primarily dealing with 1st time home buyers for years. There has always been incentives to first time buyers. The only major difference with this $8000 one is that it was more advertised than others (because it was meant to spur the economy). Last year if you were a first time buyer you were eligible to receive $7500 (repayable over 15 yrs @ 0%).
$8000 is also a loan (but "forgiven" after 3 yrs in the home. It carrys the same red tape as many other 1st time buyer incentives).

So I vote to extended it...but, if not at least revert to the previous model

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