Should the Home Buyer Tax Credit Deadline be Extended?

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With the deadline rapidly approaching for the $ 8,000 tax credit for first time home buyers and $ 6,500 for repeat home buyers, there are many consumer groups who are calling for an extension.  Should the real estate community lobby behind consumers and request an extension?  I answer with a resolute NO.

According to a JBREC report, the tax credit was far less efficacious this spring than it was in the fall, when the deadline was originally set to expire.  Key indicators, including high unemployment, increase in existing home inventory, and low consumer confidence, do not indicate that continuing tax incentives would currently give a boost to the real estate market.   Buyers who were enticed to buy due to the additional financial benefits of the tax credit have already made their purchase and there is little to no evidence that the expanding the deadline will drive the economy upward.  Today I had a buyer panicking that they ‘needed’ to find a house prior to the April 30 deadline, yet had absolutely done nothing (i.e. pre-approval, researching suitable properties) to show they were serious.  So should the government indulge the fickle nature of some buyers?  NO.

Furthermore, the real estate market crisis has become less of  a national issue and more of local one (with a disproportionally large percentage of distressed properties being in a few select states, 35 counties in particular) and as such, it should be tackled on a local scale, such as California’s plan.  Ultimately, the federal government can not continue to artificially inflate the economy with tax credits and  low interest rates, it is simply not a long-term strategy that will sustain economic growth and stability.  Not only does it take away from tax revenue, but it prevents the free market from stabilizing real estate prices.  With that, let the tax credit end and the economic healing process can begin.

About Author

Alex is a real estate agent specializing in properties in south Maui. For an up-to-date blog on Maui and Hawaii news, events, and real estate trends, visit his blog at or search his site at


  1. Greg Fleischaker on

    Alex, I couldn’t agree more, well stated. In Louisville, I worked with a few people who received their tax credit, but I believe they would have bought regardless. They were merely in the right place at the right time. I have yet to put a deal together where the stimulus was actually the stimulus for the transaction.

  2. I see this a good thing. People that bought were going to buy anyway, lets cut it back rather then cut it off. Say and $5000 credit and a $3000 credit. Maybe not so drastic and a total end to it all.

    More so let focus on jobs and unemployment. Lets get Tier 5 going, as it was that only stimulus that worked. Talk about to big to fail, and then get some focus on getting Americans back to work.

  3. Alex, I agree to your response of NO. We need to stop paying people to buy homes and let the market correct itself. I personally feel that we the people would be better served if the government would take that money and use it to create more jobs so people could actually buy the houses.

    Visit Liz Voss’s last blog at San Antonio Homes for Sale.

  4. I agree completely. It may have given buyers a tad more incentive, but I find it hard to believe that the tax credit was the only reason that people bought. The vast majority would have bought regardless if the tax credit was there or not, so it is essentially giving away money in many cases. At this point, it is just negatively affecting the long term outcome.

  5. Thanks to all who replied. We will see the long-term effects starting in July, after the deadline for transactions to be completed has expired. In the meantime, let’s get ready for a good spring home buying season.

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