Congress has extended the home tax credit with the reduction of $1500. The New Home Tax Credit in now $6,500 down from the initial $8,000 that caused a slight ripple in housing market sales.

New home buyers did have until November 30, 2009 to take advantage of the new home tax credit offered by the government of $8,000. Real estate agents have been using the government sponsored program to entice new home buyers to close their housing deals. The $8,000 New Home Tax Credit which has been reduced to $6,500 is only available to new home buyers. The financing of existing home owners having been refinanced made it plausible for the program to be monitored to only new home buyers. The $8,000 New Home Tax Credit, however, is available to existing home owners if they have not owned a principal home residence within the last three years only as reported up until November 30, 2009, however.

The New Home Tax Credit is one of the many programs the government initiated to boost the housing market that had downturned after the creative financing techniques of previous home buying years. Creative financing such as Adjustable Rate Mortgages left many home owner’s owing more than the equity or value of their homes. To stimulate the housing market, the government issued an $8,000 New Home Tax Credit to new home buyers with an $1,000 incentive bonus to loan officers who offered programs to save the homes of existing home owners. The $8,000 New Home Tax Credit has been in effect as a home buyer incentive government sponsored program since February of 2009. Although the $8,000 New Home Tax Credit was introduced in February of 2009, it took a while for the new home buyers to take advantage of the incentive.

The Internal Revenue Service Reported that about 1.4 million new home buyers have benefited from the $8,000 New Home Tax Credit. Real estate agents nationwide have seen increases in home buying as a result in the lower priced housing market. In the eastern part of the country, the $8,000 Home Tax Credit has been effective with boosting the home sales of houses priced $200,000 or less.

The homes that are eligible for the $8,000 Home Tax Credit must be financed through Fannie Mae or Freddie Mac which are federal guaranteed loans agencies. These two government agencies have also received a financial bailout from the government. The program that had real estate agents posting signs advertising the $8,000 Home Tax Credit for new home buyers will be coming down as of November 30, 2009. Housing contracts will have to be signed by mid October to get the closing mortgage paperwork completed by the November 30, 2009 deadline.

Real Estate agents are saying the $8,000 New Home Tax Credit was being used mostly by homeowners who had considered buying a home before the new legislation went into effect in February of 2009. Home sellers in the housing industry had hoped to have more new home buyers enter the market because of the $8,000 Home Tax Credit. The real estate market usually slopes downwards at the latter part of the year in which the $8,000 New Home Tax Credit is ending. The extension of the $8,000 Home Tax Credit would have been a great incentive to get those new home buyers into the housing market during that part of the year.

A housing bill has been introduced in Congress by the National Association of Realtors to increase the $8,000 Home Tax Credit housing bill to $15,000 making it available to all home buyers. The bill is still on the floor in the Senate and the House of Representatives. Real estate agents are advising new home owners to not wait to buy a home in the anticipation of an extension of the $8,000 Home Tax Credit. They are advising new home buyers to take advantage of the present incentive before time runs out and to use it if they have been in the market to buy a new home. However, real estate agents are advising new home buyers to not wait for a bigger and better government housing program once the $8,000 Home Tax Credit expires.

Real estate agents are saying that a home buyers are planning to forego buying a home if they miss the deadline of the $8,000 Home Tax Credit. Real estate agents are advising these new home buyers to enter the housing market regardless of the tax credit because of the economy that is recovering from the recession. As the popular real estate saying goes: Now is always the right time to buy a home.