Effect of expiring tax cuts on the rich
Tax cuts on hold until November

First-time homebuyer credit's final week: Close by Sept. 30 to claim it

Did you have contract on a house in place on April 30?

Do you meet the requirements to qualify for the expanded first-time homebuyer tax credit?

If so and you haven't closed on your new home yet, get to prodding, pleading and generally nagging whoever it takes to get the paperwork signed, sealed and delivered by next Thursday.

A week from today, Sept. 30, is when the homebuyer tax credit finally ends.

A sold sign outside a home recently for sale is seen in Arlington, Virginia on July 23, 2009. The Dow Jones industrial marked its first close above 9,000 since January after news that existing home sales rose in June for the third straight month. (UPI Photo/Alexis C. Glenn) Photo via Newscom

As we wind up this ostensibly well-intended tax credit, data is coming in that indicates that for the most part the tax break has had a negligible effect.

In Life After the Home Buyer Tax Credit for yesterday's Economix blog, Casey B. Mulligan says:

"For now, it appears that, aside from this spring's rush to meet the tax-credit deadline, the housing market after the tax credit will proceed at much the same pace it did for the time that the credit was in place."

And today, we learn that existing home sales bounced back in August.

Yes, some of those sales, which the National Association of Realtors report bases on actual property closings, probably were by folks taking advantage of the first-time homebuyer credit's extension until Sept. 30.

But not all of them.

What we must wait and hope for is the housing sector to find its natural footing now that it's not artificially propped up by the homebuyer tax credit. That seems to be happening.

"Home values have shown stabilizing trends over the past year, even as the economy shed millions of jobs, because of the home buyer tax credit stimulus," said Lawrence Yun, chief economist for the National Association of Realtors. "Now that the economy is adding some jobs, the housing market needs to steadily improve and eventually stand on its own."

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