First time Homebuyer Tax Credit given new life! Extented and Expanded??

I was originally going to post some information on the reported extension of the homebuyer tax credit, but I thought is prudent to wait for more news to materialize about the details of the proposed extension and expansion of the first time home buyer tax credit.

I first heard of the extension from a blogger on Active Rain. In classic fashion senators said it's a done deal. Leaving out that there are many issues still unresolved. Here is where we stand as of October 29th. The tax credit would be extended through the end of June. The home must be in contract by April 30th, 2010 and close no later than 60 days.

Move up buyers would get a new tax credit: "Tax credit for move-up buyers will be less than for first-time buyers, but still significant. They will qualify for a credit of up to $6,500 and must have owned their current homes at least five years. Under the current program and the new one for 2010, first-time buyers qualify for up to $8,000 and cannot have owned a home for the past three years."

One other provision still being worked out is adjusting the income limitations to raise them to $125,000 for a individual and 225,000 for a couple filing jointly. This is up from the previous of $75,000 to $150,000 that is currently in place for the current tax credit.

I was never a big fan of the tax credit however, it has been a motivating factor for many buyers and has generated over 400K in new home purchase transactions. It was a large factor in GDP growth in Quarter 4 of this year (for the first time in 4quarters.) However I always thought that ending the credit in November was a double negative. In the real estate industry, we all know the months of November & December are seasonally slow. And I don't believe this is going to spur major activity over the holiday season, it will keep it from completely falling off. Keep in mind that this still has some final tweaking before the final bill is done, but I think with today's market reaction, to return to strong job growth the economy needs to keep heading in the right direction, up. The extension of the tax credit may be the thing that keeps this economy on the road to recovery.