Home Buyer Credit to be Extended?
November 3, 2009
Last night Congress completed the first step of a process which may lead to the passage of a bill extending the first-time home buyer credit through April of 2010.
This particular bill would provide an $8,000 tax credit to first-time home buyers (by definition, buyers who haven’t owned a home in the past three years) as well as $6,500 credit for buyers who have lived in thier prior residences for at least 5 years.
If the bill is passed, expect housing figures and manufacturing indexes to continue to rise through the first quarter of 2010.
The extension and expansion of the credit will for certain add to the growth of the US economy but one has to ask, at what expense? Much of the spending that has contributed to the growth has come from borrowed money – many believe that this false sense of growth can have a negative impact down the road. Growing inventories and foreclosures at the same time can be dangerous should an improvement in employment lag longer than expected.
Stay tuned for the release of the October jobs report this Friday for more details regarding employment growth.
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