As builders rush to sign contracts and start homes in advance of the Nov. 30 deadline for using the federal housing tax credits for first-time buyers, the NAHB and other groups have begun advocating for an extension.
The NAHB wants the government to move the deadline ahead by one year, to Nov. 30, 2010. It also wants Congress to expand the credit to all buyers purchasing a principal residence, not just first-time home buyers.
"If Congress acts to extend the tax credit program, it would spur 383,000 additional home sales, including 80,000 housing starts, creating nearly 350,000 jobs over the coming year," said Joe Robson, NAHB's chairman and a builder in Oklahoma. "That's good for the economy and good for America."
Of course, it's also good for builders. Public companies and private firms alike have said the tax credit has provided a much-needed way to attract and capture customers. Fischer Homes, for example, said it had the best quarterly sales since 2007 in 2009's second quarter, largely due to the tax credit.
Those who supply builders also support pushing out the deadline, according to the National Lumber and Building Materials Dealers Association (NLBMDA). "The extension of the bill is crucial and if we do not act quickly, then it will expire and we will lose the ground we have gained ... The economy will not recover without a stable housing market," the organization noted in a message urging its members to call their elected representatives.
While many housing groups support extending the housing tax credit, others worry that an extension would cause consumers to postpone their decision to buy, rather than responding the urgency of an expiring federal credit. Economists also suggest that expanding the credit to all buyers is less effective economically than the current first-time buyer requirement. Offering such a credit to first-time buyers, they argue, gets new people into the housing market, whereas a credit available to all purchasers also helps people who would have bought a home anyway, which is less of a gain for the larger economy.
Alison Rice is senior editor, online, at BUILDER magazine.