Realtors want an extension for first-time purchase tax credit

Real estate executives want Congress to extend the first-time homebuyer tax credit, which they say “has been vital in stabilizing the U.S. housing market,” according to Earl Lee, president of Prudential Real Estate and Relocation Services. Lee said the federal tax credit, which is set to expire Dec. 1, has helped bring equilibrium to a besieged U.S. housing market. “The real estate market is a game changer,” Lee said. “It’s not coincidental that the U.S. economy has improved as residential real estate has improved.” Lee said the housing recovery is fragile and Congress could help by extending the tax credit by at least another year. There are several proposals now before lawmakers to extend the tax credit into next year. The National Association of Realtors estimates that 1.8 million homebuyers will take advantage of the tax this year and that one-fifth of them would not have purchased a home without the credit. According to the Association, first-time homebuyers represented about half of home sales logged during the first half of this year. The measure allows first-time homebuyers, and those who have not owned a principal residence in three years, to take a credit against their federal income taxes of as much as $8,000. “The risks of not having an extension — including a further decline in home prices — are very clear to me,” Lee said. “We are not out of the woods by any means.”