Tax Credits
A coalition of real estate organizations including the National Association of Realtors, the Mortgage Bankers Association, and the National Association of Home Builders have joined forces in urging the federal government to continue the current First-Time Homebuyer Tax Credit. The three industry organizations sent a joint letter to the tax credit to the Secretaries of the Treasury and Housing and Urban Development along with the White House in hopes of seeing the tax credit continued for an additional twelve-month period; it is currently set to expire November 30, 2009. The tax credit is credited with creating over 350,000 home sales nationwide, bolstering the beleaguered housing industry and providing employment for builders in Texas and nationwide.
This follows on the heels of an appearance by David Crowe, Chief Economist of the National Association of Home Builders, before the Senate Banking Committee. Crowe indicated that the tax credit has been a boon to the home building industry, providing employment and lessening the impact of the recent housing market slump. He urged Congress to extend the First-Time Homebuyer Tax Credit and expand it to include all buyers of a principal residence. According to Crowe, it is estimated that expanding and extending the tax credit for an additional year would spur over 380,000 home purchases and add around 350,000 new jobs to the economy.
The National Association of Home Builders is also encouraging the relaxing of overly restrictive lending regulations that are stifling the ability of home buyers to finance new mortgages; these regulations contribute to artificially lowered appraisal amounts due to foreclosure homes being included in the figures for comparable properties. This has hit new home construction especially hard, since it essentially compares properties in a state of neglect and disrepair with newly built homes in immaculate condition. Crowe urged the Federal Housing Administration to rethink their policies on these appraisals, and to take into consideration the difference between distressed properties and new homes and ensure that appraisals reflect this significant difference.
Home builders and buyers alike would benefit from the expansion and extension of the tax credit and a reassessment of the current property appraisal process. By supporting the housing sector, these changes could offer a boost to the economy throughout Texas. It’s essential for Texas builders and prospective home buyers to contact their federal representatives in order to push for these important changes and ensure the continued recovery of the home building industry.
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