The $8000 first-time homebuyer tax credit expires as of December 1, 2009.  But the usefulness of the credit diminishes daily if the credit is not extended well before that date.

A homebuyer is eligible for the tax credit only if the home is “purchased” before December 1, 2009.  That means that buyers have to find a house, complete a contract, satisfy any contingencies, secure financing and go to closing by November 30.  Accomplishing those tasks by November 30 will become more difficult with every passing day.  In today’s market, it generally takes between 45 and 60 days to go from contract to closing.

Without Congressional action NOW, the market may freeze again – possibly as soon as October.

The tax credit has been effective.  NAR research suggests that as many as 350,000 sales this year can be directly attributed to the availability of the credit. 

The tax credit stimulated market activity.  The volume of housing sales has improved steadily every month since the credit was enacted.  The credit pulled people from the sidelines and created some momentum that had been absent.

The housing market remains fragile.  The market has improved and prices have stabilized in many areas, but the market has not fully corrected.  Retaining the credit sustains that recovery.

Inventory may remain unusually high.  The waves of foreclosures attributable to subprime and other improper lending practices are working themselves through the system.  Presently, high unemployment rates pose a threat to homeowners and could set another round of foreclosures in motion.  If foreclosure rates were to spike again, inventories could become bloated again.  Incentives are still needed to keep the market moving.

Home sales continue to stimulate economic activity.  The economy will never fully recover until housing markets fully recover.  Thus, the stimulus the credit provides is still needed.  NAR estimates that every sale generates approximately $60,000 of additional economic activity. And expanding the credit beyond first-time homebuyers would give the economy a much needed kick.

We will continue to need the homebuyer credit.  Congress must act NOW to be sure that the credit is available through 2010.

from njar call to action