WaPo: Clock Is Ticking For First Time Home Buyers Tax Credit

Everyone coming through the door is talking about this tax credit.  They know exactly what it is and when it expires, and they’re rushing.

– Brad Cohen, Mason Dixon Funding, Rockville

Front page Washington Post story today on the Nov. 30 expiration of the $8,000 first time home buyer tax credit and the rush of buyers and the political debate surrounding it.  The real estate industry is obviously lobbying hard for an extension and apparently there is a bipartisan proposal to maintain the credit in its current form until next June.

According to the post, 1.4 million first time buyers have taken advantage of the credit for a cost of around $11 billion.  The estimated cost of the program through Nov is supposed to be $15 billion and extending it until next June would cost another $15 billion, according to Moody’s Economy.com’s Chief Economist Mark Zandi.

Will the tax credit get extended?  What happens to the housing market, and the banks and the economy by extension, if it doesn’t?

The same kind of questions are pertinent concering the Fed’s mortgage backed securities purchases as well.

Can the economy survive without all this massive government stimulus of the housing and mortgage markets?