September 24, 2009

As Time Runs Out on First-Time Homebuyer Tax Credit, Gillibrand Moves for 6 Month Extension

More Than 8,000 New Yorkers Have Taken Advantage of the Credit, Saving Nearly $4 Million

Washington, DC - U.S. Senator Kirsten Gillibrand co-sponsored legislation today that would extend the $8,000 tax credit for first-time homebuyers for another six months. Senator Gillibrand is joining with Senators Ben Cardin (D-MD), Johnny Isakson (R-GA) and others in the push to extend the tax credit. Economists have cited the original measure as having been critical to stabilizing the housing markets.  More than 8,000 New Yorkers took advantage of the credit through August this year, saving approximately $3.96 million, according to the U.S. Department of the Treasury.

"These tax credits were the right step to help bring our housing market back from the brink, but now is not the time to let up," Senator Gillibrand said. "As we continue our economic recovery, this legislation will extend the tax credits to give our housing market more time to fully stabilize, help rebuild our economy for the long term and help more first-time buyers afford a home."

The first-time homebuyer tax credit has been a driving force to shore up the housing market and spur new buyers. In fact, since the start of this year, the tax credit has led to over 150,000 new and existing home sales, according to estimates from the National Association of Home Builders (NAHB). And Moody's Chief Economist Mark Zandi expects the credit to draw nearly 400,000 buyers into the market by the end of the year. As many as 40 percent of all home buyers this year will qualify for the credit.

The economic downturn has been a significant barrier for keeping potential first-time buyers off the market. July's home sales among first-time buyers were 10 percent below the average from the past six years, according to the National Association of Realtors. Unemployment among workers ages 25-34 rose to 10.4 percent -- .7 percent above the workforce as a whole - preventing these young potential buyers from pursuing homeownership.

Senator Gillibrand worked hard to make this tax credit available as part of the Housing and Economic Recovery Act that Congress passed last year to stabilize the housing market. Now, she's pushing to extend the credit to give the housing market more time to stabilize and help more Americans purchase their first home.