Joe Sestak Urges Congress to Extend First-time Home Buyers Tax Credit

By SESTAK FOR SENATE

MEDIA, PA – Following his introduction of the First-time Homebuyer Credit Continuation Act, Democratic U.S. Senate candidate, Congressman Joe Sestak held a news conference today in Philadelphia to call on Congress to turn this legislation into law. Joe helped pass the legislation as part of the Economic Stimulus bill, which has already helped more than one million people purchase a new home, but is set to expire at the end of November. Outside a home set to go on sale this week, he highlighted the positive impact his legislation will have on America’s economy.

“It is our job in Congress to ensure that we pass policies that continue to help people achieve the American Dream,” Joe said. “The First-Time Homebuyers Tax Credit has helped hundreds of thousands of people realize that dream at a time when the American economy is steadily recovering – particularly for the thousands of Veterans returning from deployment who have not yet been able to benefit from this program. Extending the First-Time Homebuyer Tax Credit will continue the resurgence of the housing market and ultimately fuel the broader-based recovery of our economy.”

Joe spoke about his recent letter to the House Speaker Nancy Pelosi urging her to bring his bill to the floor. During the conference, he stood alongside two real estate agents who have worked with many people who have directly benefited from the First-Time Homebuyers Tax Credit. The credit helps families earning $150,000 or less (Adjusted Gross Income), or individuals making $75,000 or less, by providing a ten percent tax credit to purchase their first home. With this credit, first time homebuyers will have up to $8,000 dollars to put toward homes costing $80,000 or more.

In his letter to Speaker Pelosi, Joe highlighted the fact that each home purchase pumps about $63,000 into our economic recovery, which is the equivalent of one new job added to the employment figures. Between 1.1 and 1.4 million home sales this year have been to first-time homebuyers. In fact, a recent study directly attributes the sale of 357,000 homes from February 17, 2009 to September 15, 2009 to the First-Time Home Buyers Credit and Moody’s Economy.com has calculated that the tax credit will draw approximately 400,000 new homebuyers into the market this year.

“Allowing the tax credit to expire before our economic recovery efforts have had sufficient time to take their full effect will cause the economic and market activity that resulted from the tax credit to wither, causing yet another decline in the housing market,” Joe added. “This will harm the broader economy just as we are beginning to climb out of a deep recession. That is why I recently wrote a letter to the Speaker, urging her to bring the bill to the floor.”

In August 2008, homes were on the market an average of ten months. By November 2008, the inventory peaked to 10.6 months. When the current $8000 tax credit was enacted in February, the inventory of homes for sale was 9.1 months. Since then, the inventory has declined each month. The most recent data (August 2009) shows an inventory level of 8.2 months: closer to “normal” of 6 months that was the rate in August 2007.

As a Representative in Congress, Joe Sestak has worked tirelessly to support home ownership in Pennsylvania. His office has worked to help more than 500 families facing foreclosure stay in their homes. Among his legislative accomplishments, he has voted for the TARP Reform and Accountability Act of 2009, which requires the Treasury Department to develop a program to stimulate demand for home purchases and provides for a foreclosure mitigation plan of between $40 and $100 billion. He has consistently advocated for incentives to first-time home buyers, having introduced an amendment to the economic stimulus bill to expand the Home Buyer’s Tax Credit cap from $7,500 to 10% of the final sale price of a home – capped at 3.5% of Federal Housing Administration loan limits.

Congressman Sestak’s letter to Speaker Pelosi follows:

October 2, 2009

The Honorable Nancy Pelosi
Speaker
H-232 U.S. Capitol Building
Washington, DC 20515

Dear Madam Speaker,

As you know, existing-home sales and home prices have recently experienced a moderate increase in some markets throughout the country. However, this increase is the result– in part– of the First-Time Homebuyer Tax Credit, which is due to expire on November 30, 2009. The Credit– initially enacted by the Housing and Economic Recovery Act and subsequently enhanced by the American Recovery and Reinvestment Act– was a measure I strongly supported and has proven to be pivotal in providing the incentive and opportunity for first-time home buyers to take advantage of historically low interest rates and more affordable home prices– playing a key role in stabilizing the housing market and the broader economic system.

Since its implementation, the IRS has reported that 1.4 million taxpayers have taken advantage of the tax credit. In fact, a recent study directly attributes the sale of 357,000 homes from February 17, 2009 to September 15, 2009 to the First-Time Home Buyers Credit and Moody’s Economy.com has calculated that the tax credit will draw approximately 400,000 new home buyers into the market this year.

Although our concerted efforts in the housing market have prevented the current recession from becoming more deeply protracted, continued action is necessary. As the Chief Economist of Moody’s Economy.com recently noted, “it’s too early for policy makers to step away from the market; the risks are too high.” In a still fragile real estate market, the success of our economic recovery efforts depends on continued and aggressive action in the housing sector.

I am, therefore, writing to support an extension of the First-Time Homebuyer Tax Credit. To ensure immediate consideration, I recently introduced the First-Time Homebuyer Credit Continuation Act of 2009, which extends the current Credit to December 31, 2010. I now urge you to immediately bring this bill or similar legislation to the floor.

Allowing the tax credit to expire before our economic recovery efforts have had sufficient time to take their full effect will cause the economic and market activity that resulted from the tax credit to wither, causing yet another decline in the housing market. This will harm the broader economy just as we are beginning to climb out of deep recession.

As you consider this matter, I ask that you take into account the 400,000 working families who would benefit from an extension of the First-Time Homebuyer Tax Credit – including the thousands of Veterans returning from deployment who have not yet been able to benefit from this program because of their time away from home in service to our nation.

Extending the First-Time Homebuyer Tax Credit will continue the resurgence of the housing market and ultimately fuel the broader based recovery of our economy. I look forward to working with you on an extension of the Credit and your immediate attention to this matter.

Warmly,

Joe Sestak
Member of Congress

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October 14, 2009 at 4:21 pm

--pa2010.com Staff