Industry to Congress: Extend Homebuyer Tax Credit
Representatives of the real estate agent and land title industries testified in Congress that an extension of the $8,000 first-time homebuyer tax credit is the best tool for US housing markets to recover. American Land Title Association (ALTA) president Mike Pryor called for not only the extension of the deadline to the credit, but also an effort to remove the income restrictions and the requirement that buyers be a first-time home purchaser. “Incentives like low interest rates and a limited, first-time homebuyer tax credit ensure that revenue and employment losses are not as bad as they could be. Congress should take simple, common sense steps to remove barriers to growth in the title industry and prevent additional barriers from being created,” Pryor told the House Small Business Committee. Representatives from the National Association of Realtors (NAR) also testified at the hearing. NAR regional vice president and NY broker Joseph Canfora testified that according to association data, 355,000 to 400,000 purchases were attributed directly to the credit. “The more robust the credit and the greater its duration, the greater the chance that the housing market can perform its traditional role of helping the economy move out of a recession,” Canfora said. Canfora also said that the tax credit helped reduce housing inventory. Noting that a balanced market typically has a six- to seven-month supply of homes. In February, when the credit was enacted, the US market had a 9.1-month inventory, Canfora said. In August, the inventory was at an 8.2-month supply. National Association of Home Builders (NAHB) chairman Joe Robson, a builder in Tulsa, Okla., told the committee extending the tax credit would help alleviate the over supply of homes and create more demand for builders, providing a boost to the sector. "We estimate that this would increase home purchases by 383,000 in the next year and help mitigate the foreclosure crisis by whittling down inventory at all levels of the housing market, setting the stage for a full recovery," said Robson. "This stimulus alone would create nearly 350,000 jobs over the coming year, which is exactly what the economy needs right now." Robson added builders are losing sales because appraisals are being deflated by distressed property sales used to evaluate regional comparable sales. “Any prospective buyer would recognize the differences in the value between a well-kept home and a distressed property that is damaged or not properly maintained. The same should be true of an appraiser,” Robson said. As HousingWire previously reported, a survey conducted by Harris Interactive on behalf of Zillow.com showed nearly one-third of prospective first-time homebuyers said an extension of the tax credit would have “no influence” on their decision to purchase a home in 2010. Write to Austin Kilgore.