The U.S. Senate voted overwhelmingly Wednesday to expand unemployment benefits and extend and expand the first-time homebuyer tax credit that is scheduled to expire at the end of the month.
The vote is good news for Triangle real estate professionals who have been watching anxiously to see whether Congress would act to keep the tax credit. The U.S. House is expected to quickly follow the Senate's lead and pass a similar bill.
The tax credit is thought to be one of the main reasons national and Triangle home sales showed signs of improvements in recent months, and many real estate agents feared what would happen to the market when it went away.
The credit allows first-time buyers to reduce their federal income taxes by 10 percent of the price of a home, up to a maximum of $8,000. The new version of the tax credit would be expanded to include a $6,500 credit for repeat buyers who have lived in their current homes at least five years. Under the Senate bill extension, purchase agreements would have to be signed by April 30, 2010 and closings made final by June 30.
John Wood, president of the Raleigh Regional Association of Realtors and a Re/Max United agent in Cary, said his members are thrilled with the Senate's action.
"Even though not all homebuyers will qualify, obviously it brings a whole pool of buyers into the marketplace and gives an additional incentive to consider moving up or down," he said. "We certainly hope Congress the President will speed this through this week so that everybody knows where we stand."
Wood said expanding the tax credit would also likely help higher priced segments of the housing market. Much of the increased sales activity in recent months has involved homes priced below $250,000.