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Congress is considering proposals to greatly expand a soon-to-expire $8,000 tax credit for first-time homebuyers – potentially applying it to all but the wealthiest homebuyers. The credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30.
Beyond extending that deadline, some lawmakers want to make the credit available to all homebuyers who meet income eligibility requirements. And some want to increase the amount of the credit from $8,000 to $15,000.
By the end of November, the credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, according to estimates by the National Association of Realtors®.
“The most fundamental argument for the credit is that nothing works in the economy if housing is falling – it hurts household wealth and credit becomes tight. [The credit] is a good insurance policy. It’s vital to stem the housing price declines,” said Mark Zandi, chief economist of MoodysEconomy.com.
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