Homebuyer Tax Credit Extended (Again)
Yep, the popular program which allows us taxpayers to pay for people to buy homes has been extended for a second time. Apparently, the post-rebate housing data freaked out the politicians so they extended the measure – with both Republican & Democrat support.
Apparently, only a handful of these morons understand that this will not prevent housing from moving towards its true market-oriented equilibrium levels – it will only delay it. Senator DeMint from South Carolina understands this, and he tried to block the extension:
“We only created a bubble, which will eventually burst,” DeMint said on the Senate floor late yesterday as the deadline was about to expire. “For the people who haven’t closed on their homes by today, it’s not that they won’t get their house, only that they won’t get a taxpayer subsidy for having bought a house now rather than later.”
The reality is that with each extension of this program, the effectiveness will be smaller and smaller – it’s similar to a drug addict who requires an increased dose each time he shoots up because the same dosage just doesn’t provide the same boost.
To be clear, this only applies to those who had signed a purchase agreement before the previous deadline but failed to close on the house. They will now have until September to close. As housing numbers continue to be terrible, I expect even more extensions and further incentives to “fix housing”