Politicians back housing tax credit as monthly sales slump
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An unexpected dip in new-home sales last month has led to a very expected increase in support for political help for potential buyers.
The Commerce Department announced that sales fell 3.6% to 402,000 from August’s 417,000, which was revised downward. September’s decline was the first since March.
Sales in September were down 7.8% from a year ago. and the median sales price was off 9.1% from last year.
The drop was caused in part by the expiration at the end of November of a tax credit for first-time home buyers. The maximum that can be claimed is $8,000.
The tax credit is very popular with Realtors; the construction industry, which has gotten or kept hundreds of thousands of jobs and, of course, politicians. The IRS has reported that about 1.5 million claims for the credit have been processed. Home sales are expected to be up by 1.5% this year instead of down by an estimated 6%, according to Realtors.
Despite claims of fraud and abuse, both Republicans and Democrats have said they support some form of extension of the tax credit. One likely plan would continue the credit but decrease the amount over the next year.
“There has been general agreement by a significant number of senators, Democrats and Republicans, to get this done,” Senate Majority Leader Harry Reid said today in remarks on the Senate floor.
– Michael Muskal
