Provision for $8,000 refund part of bill to extend jobless aid
Washington Post Staff Writer
By Dina ElBoghdady
Thursday, November 5, 2009
The Senate voted Wednesday to renew the government's $8,000 tax credit for first-time
home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits. For the first time, the tax credit program
would also enable many homeowners who buy a new primary residence to receive a
$6,500 refund. The measure was attached to a bill that would provide 20 weeks of unemployment benefits in more than two dozen states with jobless rates above 8.5 percent and up to 14 weeks elsewhere. Another provision in the bill would allow businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years. The bill, which passed 98 to 0, should reach
the House floor by Thursday, House Majority Leader Steny H. Hoyer (D-Md.)said in a statement. His office said the legislation would then go to the White House for the president's signature. The Obama administration has previously supported extending the $8,000 tax credit,and without congressional action the program would end Nov. 30.
Under the bill, first-time home buyers would receive the $8,000 tax credit if they sign a contract by April 30 and close on it by June 30. The plan would also make those who buy a new primary residence eligible for the $6,500 credit if they owned their current home for at least five consecutive years in the previous eight years.
But the measure limits the purchase price of the home to $800,000. It also imposes
income caps so that people who make more than $125,000 annually and couples who
make more than $225,000 would not be eligible for the program, which is estimated
to cost $10 billion. Sen. Johnny Isakson (R-Ga.), a longtime advocate of the tax credit, praised passage of the bill in his chamber but said the extension would be the last one. "Tax credits like this only work by creating the sense of The tax credit and the broader bill in which it is included are part of a series of Democratic-led initiatives aimed at helping the economy and people who have lost their jobs. The unemployment benefits of more than 1 million people would lapse without this extension, according to the National Employment Law Project, a nonpartisan group that tracks the issue. More than 15 million Americans are unemployed, more than a third of them for longer than six months.
Although the legislation gained wide bipartisan support, it had been mired in
bickering for weeks as Republicans tried to attach amendments that Democrats
opposed. Party leaders from both sides voiced support for the core measures,
including the tax credit. Supporters of the tax credit, including the real estate industry, say it has energized home buyers and helped increase sales. But critics say the program is too expensive and has attracted mainly people who were going
to buy a home anyway. In the Senate's measure, taxpayers would be able to claim the credit on their 2009 income tax return for purchases made in 2010.
Friday, November 20, 2009
Real Estate Outlook: A Bright Market
The stock market may be jumping around and jittery, but housing numbers are headed in just one direction, and at least for the time being, that's better and better.
Pending home sales jumped again. They were up by 3.2 percent for the month of July, according to the National Association of Realtors. That's the sixth straight month of increases. The pending sales index is now at its highest level since June of 2007, and is 12 percent above a year ago.
Pending sales, of course, point ahead to closings scheduled within the coming two to three months. Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates. Plus, the icing on the cake for first time buyers -- the eight thousand dollar federal tax credit.
Meanwhile, evidence continues to mount that prices are turning around in growing numbers of markets around the U.S. Freddie Mac's most recent home price index, released last week, showed national prices up by an average 2.7 percent.
Clear Capital's home price index, which digs into thousands of Zip codes and small neighborhoods, reported even larger gains. Prices were up by 7.3 percent during the period July 27th to August 25th. That may sound exceptionally high, but remember: Clear Capital was the first to detect the earliest hints of rising prices months ago, well ahead of Case-Shiller and others.
Boom-to-bust markets like Phoenix are even seeing higher prices along with huge sales increases. MDA DataQuick reports that sales of houses and condos were up 28 percent in Maricopa and Pinal Counties in July over year-earlier levels. And median prices inched up -- by two percent in July over June - as the percentage of distressed sales among total sales declined to the lowest level since last October.
There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers association's national survey. Fifteen year rates averaged four point six for the week.
Looking at the larger economic picture, the Mortgage Bankers Association's top forecaster, Orawin Velz, continues to predict that the recession will be over shortly - or already is over. She cited rising consumer expenditures - up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.
Published: September 8, 2009
Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal
Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.
He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.
by Kenneth R. Harney
Pending home sales jumped again. They were up by 3.2 percent for the month of July, according to the National Association of Realtors. That's the sixth straight month of increases. The pending sales index is now at its highest level since June of 2007, and is 12 percent above a year ago.
Pending sales, of course, point ahead to closings scheduled within the coming two to three months. Lawrence Yun, chief economist for the National Association of Realtors, pointed to two key factors that are pushing up market activity - The near record affordability of house purchases caused by moderate prices and low mortgage rates. Plus, the icing on the cake for first time buyers -- the eight thousand dollar federal tax credit.
Meanwhile, evidence continues to mount that prices are turning around in growing numbers of markets around the U.S. Freddie Mac's most recent home price index, released last week, showed national prices up by an average 2.7 percent.
Clear Capital's home price index, which digs into thousands of Zip codes and small neighborhoods, reported even larger gains. Prices were up by 7.3 percent during the period July 27th to August 25th. That may sound exceptionally high, but remember: Clear Capital was the first to detect the earliest hints of rising prices months ago, well ahead of Case-Shiller and others.
Boom-to-bust markets like Phoenix are even seeing higher prices along with huge sales increases. MDA DataQuick reports that sales of houses and condos were up 28 percent in Maricopa and Pinal Counties in July over year-earlier levels. And median prices inched up -- by two percent in July over June - as the percentage of distressed sales among total sales declined to the lowest level since last October.
There was more good news on the mortgage front with average rates on thirty year fixed rate loans declining to just below 5.2 percent last week, according to the Mortgage Bankers association's national survey. Fifteen year rates averaged four point six for the week.
Looking at the larger economic picture, the Mortgage Bankers Association's top forecaster, Orawin Velz, continues to predict that the recession will be over shortly - or already is over. She cited rising consumer expenditures - up two percent in the third quarter compared with a minus one percent in the second quarter. Plus manufacturing output is up, and new layoffs declined last week.
Published: September 8, 2009
Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal
Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation.
He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.
by Kenneth R. Harney
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