Congressman Hodes Urges Extension of First-Time Homebuyer Tax Credit

Washington, DC – October 21, 2009 – (RealEstateRama) — Congressman Paul Hodes today wrote to House leadership in support of an extension of the first-time homebuyer tax credit. The $8,000 tax credit for individuals purchasing their first home is part of President Obama’s jobs and recovery plan, and is currently set to expire at the end of November 2009.

“This tax credit has helped New Hampshire families purchase their first home during a difficult economy,” said Congressman Hodes. “I look forward to working with Republicans and Democrats to extend this tax credit and provide relief to Granite State families in search of their first home.”

In the bipartisan letter, Congressman Hodes and his colleagues wrote, “With an average closing time of three months, many potential homebuyers are nearly out of time to use the credit – and an extension is needed for the credit to maximize its impact for both homebuyers and our housing market.” Since the tax credit passed in February, home sales have increased and prices have begun to stabilize. Despite this progress, the housing market remains fragile.

Earlier this month, Congressman Hodes voted for legislation that would extend the first time homebuyers tax credit through November 30, 2010 for members of the military who served on active duty for at least 90 days during 2009. The Service Members Home Ownership Tax Act of 2009 passed the House and is now awaiting action in the Senate. Veterans and other service members who are unable to take advantage of the tax credit should not miss their chance simply because their military assignment prevented them purchasing their first home.

“When our men and women in uniform come home from serving our country, they deserve our full support,” added Congressman Hodes. “This legislation will help Granite State veterans realize the dream of home ownership when they return home to their families.”

The full text of the letter is below:

Dear Speaker Pelosi and Minority Leader Boehner,

We write to you today in bipartisan agreement that the homebuyer tax credit should be extended. The federal government has pursued many avenues to ensure our economy can recover from the worst recession of our lives. Few efforts, however, have been as successful as the incentive given to first-time homebuyers.

Since the tax credit was expanded in February, we have seen house sales rise and glimpses of price stabilization. From April through July, we saw three straight months of rising prices of single family homes. The number of home sales rose 11 percent from May to June, the largest gain in eight years. In September, conservative economist Mark Zandi predicted the tax credit will contribute to 400,000 home sales and the Campbell Institute released a study concluding the tax credit contributed to 357,000 home sales between February and September of this year.

While these are positive signs for the housing market, the reality is that it remains extremely fragile. Home prices still remain 15 percent lower than a year ago and first-time homebuyers continue to make up a third of all buyers. At a time when billions are being offered to troubled financial institutions and mortgage rates remain borrower friendly, nothing is restoring confidence in the market like the first-time homebuyer tax credit. Yet, with an average closing time of three months, many potential homebuyers are nearly out of time to use the credit – and an extension is needed for the credit to maximize its impact for both homebuyers and our housing market.

While many of us have our own ideas of how to improve or expand the homebuyer tax credit, we can all agree that action is urgently needed on the credit before it expires at the end of November. As the House leadership prioritizes legislative action on provisions that will expire this year, we ask that you give full consideration to the homebuyer tax credit. We look forward to working with you to stabilize our nation’s housing market and strengthen our economy.

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