Lobbying intensifies to extend first-time home buyer tax credit

Kenneth R. Harney

Reporting from Washington - It's one of the biggest unknowns bugging would-be buyers of houses and condos this summer: Will Congress let the $8,000 nonrepayable tax credit for first-time purchasers expire as scheduled 14 weeks from now?

Or will the credit get a second life and be extended for six to 12 months, taking pressure off buyers, real estate agents and escrow companies?

That's an especially urgent matter if you're a buyer just starting to shop and you see entry-level prices bottoming out or rebounding in many local markets. The tax credit statute requires buyers to fully close on their purchases -- not just be in escrow -- no later than Nov. 30. This doesn't leave a lot of leeway for people who haven't yet decided on a specific house and who haven't nailed down financing.

The process of negotiating offers, signing sales contracts, applying for a loan and completing the closing can easily extend for two months -- or a lot longer if things get off track.

Given the rapidly approaching deadline, what's the likelihood that Congress will allow at least a little extra time? Here's a quick overview: Although Congress is on its summer break, most members of the Senate and House use part of the August recess to meet with and listen to constituents in their home districts.

This year, the two biggest housing trade groups -- the National Assn. of Realtors and the National Assn. of Home Builders -- are spending the month mounting intense lobbying campaigns to make the case for extending the credit and maybe even expanding it. The effort is targeted first at the districts of members of the two tax-writing committees -- House Ways and Means and Senate Finance -- but is expected to cover most other members as well, according to officials of the two groups.

Delegations of home builders and real estate brokers already have begun descending on district offices, delivering what Jerry Howard, president and chief executive of the builders association, calls "the hard economic facts" -- the numbers of houses sold in each Congress member's district that are attributable to the tax credit; the economic ripple effects on local businesses, manufacturers and service industries; new jobs and income; plus the additional tax revenue that all this activity will help produce for local governments.

On a national basis, according to economists at the National Assn. of Realtors, the credit will be responsible for 300,000 to 350,000 additional sales of houses this year. Each home sale generates about $63,000 in downstream "ripple effects" elsewhere in the economy, they say.

There are some signs that Congress may be getting the message. Bills are pending in both houses to extend the credit for another year. Senate Majority Leader Harry Reid (D-Nev.), whose state has been among the worst hit by the housing bust, reportedly favors an extension of the credit. He was quoted to that effect by the Las Vegas Sun on Aug. 5.

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, is cosponsoring a bill with Sen. Johnny Isakson (R-Ga.) that would raise the credit amount to a maximum of $15,000. Meanwhile, the Realtors and the builders are pushing not only for extension of the credit, but for broadening it to cover all home purchases in 2010.

4205 Wynfield Drive in Owings Mills - A Luxury Rental

Exisiting Home Sales Soar in July - Largest Monthly Increase in 10 Years

ALAN ZIBEL

The U.S. housing market is rebounding faster than expected.

Home resales in July posted the largest monthly increase in at least 10 years as first-time buyers rushed to take advantage of a tax credit that expires Nov. 30. Sales jumped 7.2 percent and beat expectations, the National Association of Realtors said Friday.

"We've got tens of thousands of homes perfect for the first-time homebuyer and we've taken advantage of that," said George Hackett, president of Coldwell Banker Real Estate in Pittsburgh.

Sales hit a seasonally adjusted annual rate of 5.24 million in July, from a pace of 4.89 million in June. It was the fourth-straight monthly increase and the strongest month since August 2007. Sales had been expected to rise to an annual pace of 5 million, according to economists surveyed by Thomson Reuters.

The risks to that healthy pace, however, are job cuts, mortgage rates and the looming end to the homebuyer tax credit. And the last one could be a doozy because first-time buyers are snapping up one out of every three homes.

First-time buyers get a credit of 10 percent of the purchase price of a home, up to $8,000. The credit phases out for singles earning more than $75,000 and couples earning more than $150,000. The real estate industry is lobbying to have the credit extended but its unclear if Congress will be swayed.

More Buyer Protections At Closing

Kenneth R. Harney

If you're applying for a loan to purchase a primary or secondary home, or planning to refinance, you should be aware of a little-publicized new set of federal consumer-protection rules that took effect July 30.

Among key changes, the new Federal Reserve guidelines require lenders to provide you initial disclosures of your mortgage costs within three business days of your loan application. If you don't get them, you can pull the plug.

The rule also prohibits lenders from collecting any fees - except a reasonable charge for checking your credit - until you've been given the loan-cost disclosures. This means no more out-of-pocket upfront application charges until you've received the truth-in-lending disclosures and an annual percentage rate (APR) calculation of those loan costs.

Read Entire Article Here

Md. spring home sales post one of nation's largest increases

Jamie Smith Hopkins

Maryland had one of the nation's largest increases in spring home sales, according to numbers released Wednesday morning by the National Association of Realtors.

Home sales from April to June were up 4.4 percent compared with a year ago, the ninth-biggest increase in the country, the trade group said. And sales jumped about 15 percent from the previous three months, topping all but six other states and Washington, D.C. The numbers are adjusted to try to account for typical seasonal variations in buying and selling.

In the spring of last year, by contrast, home sales in Maryland were falling at one of the quickest paces nationwide -- down 30 percent.

Maryland's Washington suburbs drove the spring turnaround. But the Baltimore metro area, which was seeing falling sales at the beginning of the spring, posted a small gain in June and has since picked up the pace.

Other figures from the national trade group show median prices falling almost 10 percent for single-family homes in the Baltimore metro area, compared with a year earlier.

Prices in the Cumberland metro area in Western Maryland rose about 22 percent, the second-biggest increase in the nation.

Home sales in area up 10% over '08

By Jamie Smith Hopkins

Buyers snapped up 10 percent more homes in the Baltimore metro area last month than they did a year earlier, the biggest increase since 2005 and a sign that the long-depressed housing market could finally be turning a corner.

July was the second month in a row that home sales rose year-over-year, according to numbers released Monday by Metropolitan Regional Information Systems. In June, the increase was 2 percent. The Baltimore-area housing market hasn't seen two back-to-back months of improving sales since the peak of the buying frenzy four years ago.

But home sellers eager for values to follow suit could be in for a long wait. Average prices in the metro area last month were down almost 7 percent from a year earlier, to about $298,000, which is below what they were in 2005. Some economists expect continued declines for a while.

They're predicting two housing-market "bottoms." Sales first. Then prices.

Read Entire Article Here

In good sign, job losses slow as unemployment dips

Jeannine Aversa

U.S. employers sharply scaled back layoffs in July, and the unemployment rate dipped for the first time in 15 months, sending a strong signal that the worst recession since World War II is finally ending.

A net total of 247,000 jobs were lost last month, the fewest in a year. That compares with 443,000 jobs that disappeared in June. And the unemployment rate for July declined to 9.4 percent from 9.5 percent in June.

The snapshot the Labor Department released Friday offered other encouraging news, too: Workers' hours nudged up after sinking to a record low in June, and paychecks grew after having stagnated or fallen.

"There's clearly been a turn for the better," said economist Ken Mayland, president of ClearView Economics. "The worst is behind us in terms of layoffs."

When the economy is healthy, employers need to add a net total of around 125,000 jobs a month just to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5 percent range, it would take stronger job growth -- of at least 200,000 jobs a month.

Economists say it might take until 2013 to drive down the unemployment rate to 5 percent.
Yet the new figures were better than many analysts were expecting, and they signaled improvements to an economy that has been clobbered by the recession. Analysts had been forecasting that job losses would amount to around 320,000 and that the unemployment rate would tick up to 9.6 percent.

Stocks surged after the report was released. In midmorning trading, the Dow Jones industrial average jumped 155 points, or 1.6 percent, and other stock averages also gained more than 1 percent.

Uptrend Continues in Pending Home Sales

From The National Association of Realtors

Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in June, rose 3.6 percent to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7 percent above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.

Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. “Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”

Housing begins to reverse 3-year recession in every US region, but 2nd half looks rocky

ADRIAN SAINZ, ALEX VEIGA, DANIEL WAGNER, DAVID TWIDDY

It was — note the past tense — the worst housing recession anyone but survivors of the Great Depression can remember.

From the frenzied peak of the real estate boom in 2005-2006 to the recession's trough earlier this year, home resales fell 38 percent and sales of new homes tumbled 76 percent. Construction of homes and apartments skidded 79 percent. And for the first time in more than four decades of record keeping, home prices posted consecutive annual declines.

A staggering $4 trillion in home equity was wiped out, and millions of Americans lost their homes through foreclosure.

Now take a deep breath and exhale. The worst is over.

Read the rest of this important article here.