A similar proposal failed to gain inclusion in the stimulus package that became law earlier this year, but increasing desperation in the flagging housing market could see such a bill through, with the MBA already pledging support.
Specifically, the bill would increase the homebuyer tax credit to a maximum of $15,000, make it available to all homebuyers, and eliminate income caps of $75,000 for individuals and $150,000 for couples, effectively expunging the limit.
The proposed legislation would extend the tax credit for one year from the date of enactment and allow homebuyers to claim the credit on 2009 tax returns for home purchases made in 2010.
“The first-time homebuyer tax credit has made a difference. First-time home buyers used it and the market stabilized, but we don’t have a recession in first-time home buyers. We have a recession in the move-up market,” Senator Isakson said in a statement.
“One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can.”
Unfortunately, home builders continue to look for concessions instead of lowering home prices to more reasonable levels.
“Today, in the United States, one in two sales made every day is a short sale or a foreclosure. That is an unhealthy market, and it is continuing to precipitate a downward spiral in values, loss of equity by the American people and a protracted, difficult economic time for our country,” Isakson added.