With literally hours left before the June 30 deadline, the House has passed a bill to extend the homebuyer tax credit by an additional three months.
The bill now goes to the Senate, where a similar measure has been spearheaded by Senate Majority Leader Harry Reid. It could vote on the bill as early as tomorrow, barring any issues after the recent death of Sen. Robert Byrd.
But before you get your hopes up, keep in mind that only homebuyers who signed purchase agreements by April 30 will benefit from the extension. The National Association of Realtors estimates that this accounts for 180,000 homebuyers currently stuck in closing limbo.
"We owe this to the people who have essentially followed the rule who are caught by a closing date," said House Ways and Means Committee Chairman Sander Levin.
But what about the rest of us?
With a national housing inventory of well over 4 million homes, the extension does little to incentivize homebuyers entering the market today. After the April deadline, new-home sales dropped nearly 33 percent to a record low of 300,000 in May, the Commerce Department reported. Since its creation in 2009, more than 2.6 million taxpayers claimed the tax credit through April for a total of $18.7 billion, according to the Internal Revenue Service.
Even without the tax credit, though, now is as good a time to buy as ever, thanks to the glut of inventory currently on the market and near-record-low mortgage rates. According to the Tax Policy Center, roughly 85 percent of consumers who benefited from the tax credit would have bought a home anyway.
If anything, homebuyers should see the tax credit as icing on an already delectable cake.