Spurred by an $8,000 federal tax credit for first-time homebuyers, first time homebuyers or buyers who have not owned a home for the past 3 years have been entering the market in droves to take advantage of the program. Nationwide home resales in September recorded the largest monthly increase in 26 years as buyers rushed to complete their purchases before the tax credit expires on Nov. 30.

Sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million last month from a downwardly revised pace of 5.1 million in August, the National Association of Realtors reported Friday. The association says the first-time homebuyer tax credit program has generated an extra 355,000 home sales. Prices, however, continue to be dragged down by foreclosures and short sales, where the mortgage exceeds the sales price. The nation’s median price last month was $174,900, down almost 9 percent from $191,200 a year earlier, and slightly lower than August’s median of $177,300.

Representative Kurt Schrader, Democrat from Oregon, and Representative Steve Driehaus, Democrat from Ohio, have co-sponsored a bill, H.R. 3842, that would amend the Internal Revenue Code of 1986 to extend the first time homebuyer tax credit.  The current first time homebuyer credit is set to expire on December 1st, 2009. Schrader’s bill would do two crucial things:

• The program would be extended to October 1st, 2010,
• Homes purchased “after 2008,” rather than “in 2009″ would be eligible.

There is also one other important change, you could treat the purchase of a home after December 31st, 2009 and before October 1st, 2010 as occurring on December 31st, 2009 for tax purposes. In other words, if you bought the house in 2010, you could take the credit on your 2009 tax return.

Call you representatives and urge them to support this bill.

Karen Sothoron

970-690-8680

http://www.KarenSothoron.com