Homebuyer Tax Credit Program

Homebuyer Tax Credit Program

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Washington (Mr. McDermott) is recognized for 5 minutes.

Mr. McDERMOTT. Madam Speaker, my hometown newspaper, The Seattle Times, published a front page story the other day under the headline, ``First-time Buyers Ignite Home Sales.'' The bottom line is that the $8,000 tax credit for first-time homebuyers is working and should, at a minimum, be extended before it expires at the end of November. Some experts even suggest expanding the program to anyone buying a home. And that's worth considering.

The tax credit was included in the American Recovery and Reinvestment Act that the President signed into law in February. It had an almost immediate and positive impact on the U.S. housing market, and the data proves it. This chart shows that in March, the housing was still in free fall. But in April, when the tax credit began to take hold, we see the beginning of a steady increase in home sales through August, the last month for which figures are available. The tax credit has made homeownership a reality for thousands of decent, hardworking Americans. Extending it makes financial sense, economic sense, and it especially makes middle class sense.

Across America, prices are stabilizing, and the inventory of homes for sale is trending downward toward a point where market forces do not favor either the buyer or the seller. When people buy homes, they purchase appliances and curtains and a whole list of durable goods, so the positive impact of the local economy is more than just the actual purchase. It supports other jobs.

The program is working for America's families and for America. During the Congressional debate last winter the National Association of Realtors forecast that the first-time homebuyer tax credit would generate a half a million homes. The actual number is 1.4 million homes. And that benefits local governments too because of real estate and other local taxes that help pay for vital community services like police and fire.

If the program is extended and possibly expanded, there is new forecast of the impact, and it's very impressive. The second chart shows what can happen if we keep going a little longer and jobs and wages across the country, including my State, and the congressional district, the U.S. would expect 347,000 jobs with wages of $16 billion; Washington State, 8,000 jobs, with $375 million in wages.

The first-time homebuyer credit has nurtured a fragile housing market to better health in just 6 months. Even if you're not buying a house, you benefit because the housing market is one of the underpinnings of our entire economy and is the largest asset for families. So rebuilding the housing market helps us rebuild the economy.

As you can see, there are pending home sales. In this last chart you can clearly see that the tax credit is taking the housing market and America in the right direction. But this positive news will be threatened if we don't take action now. If it takes 60 days for a mortgage application to be processed, we are nearing the end by November 30. The tax credit is the foundation of the fragile housing market recovery that we are expecting to see across this country.

Now is not the time to mess with success. The homebuyer tax credit works, and it keeps it working by extending the program into the next year. The Congress should act immediately on this because the slow-down is just around the corner if we don't keep the tax credit there.

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