By Matt Goodman
Killeen Daily Herald
The U.S. House of Representatives voted 403-12 to extend and expand the $8,000 first-time homebuyers tax credit Thursday, just a day after the U.S. Senate voted unanimously to pass it to the House.
Without the extension, first-time buyers would have had to close on a home before Nov. 30. The legislation pushed that date back to April 2010. Officials are expecting President Barack Obama to sign the legislation into law soon.
"I think we're still in a continuous place in the recovery while waiting for jobs to come back," said Waco economist Ray Perryman, "so anything that provides more encouragement would be a good thing right now."
The tax credit extension added a $6,500 stipend to homeowners who have lived in a home for at least five years and wish to upgrade, thus further stimulating the market. The home cannot be worth more than $800,000.
"They're not going to get it just for living in a house, it's for people who are thinking of maybe moving up," said Jose Segarra, spokesman for the Fort Hood Area Association of Realtors. "For instance, maybe the house has gotten smaller because my family's gotten bigger, so I'm thinking of buying; it's to entice them to move up."
The original tax credit was included in the American Recovery and Reinvestment Act of 2009 as a way to breathe life into a struggling housing market. Congressional analysts believe the extension could cost as much as $16.7 billion, while the original tax credit totaled about $6.6 billion.
In the Fort Hood-area housing market – which includes Copperas Cove, Killeen, Harker Heights and Nolanville – home sales have steadily increased every month, but none since the tax credit was issued in February.
Only 138 homes were sold in January this year in the Fort Hood area, while 212 were sold in January of 2008. But in February, home sales increased monthly until September, when 30 fewer homes were sold than in August.
Perryman expects the extension to further stimulate the market, though its effects will not be as apparent as when the credit was first established.
"Generally speaking it would not have the same effect as the first time," he said. "But you'll see an extra push from people who weren't able (to qualify) before but are able now with the $6,500 credit."
Contact Matt Goodman at firstname.lastname@example.org or (254) 501-7550.