Phoenix Real Estate Blog: Breaking News – Obama to Extend Homebuyer Tax Credit

Earlier today the House signed a bill that will extend (and expand) the first-time homebuyer’s tax credit and introduce a similar credit for people who already own their home but need to move. President Obama is expected to sign the bill into law on Friday.

Here’s what the law does:

Extends the $8,000 first-time homebuyer tax credit to May 1, 2010.

Creates a new credit of up to $6,500 for existing homeowners who buy a new residence if they have lived in their current one for at least five of the last eight years.

Expands both credits to include individuals making up to $125,000 a year and couples making up to $225,000 (the income limits used to be $75,000 and $150,000 respectively). After those limits are reached, the credits are phased out.

Experts estimate that the extension and expansion of the homebuyer tax credits will cost about $11 billion. The credit has been used in 1.2 million home purchases so far this year; according to the National Association of Realtors, 350,000 of those homes wouldn’t have been purchased without the credit.

What do you think? Is extending and expanding the homebuyer tax credits a good idea? Click on the “comments” link below and join the conversation!