Congress set to extend $8,000 home buyer tax credit

By Money Matters Editors

It appears Congress is about set to extend the $8,000 federal income tax credit for first-time home buyers. The credit is set to expire November 30.

Some have argued against an extension, but Money Matters Editors disagree. On the contrary, the credit should be expanded, as well as being extended.

And the reasons are obvious enough: the housing sector affects literally dozens of spin-off/lateral sectors - everything from appliances, to furniture, to lawn/garden equipment, even insurance gets a boost when the housing sector does well. True, the post-bubble housing sector may not account for as large a percent of U.S. GDP as it did in 2003-20007, but it's still substantial. And the housing sector has been down long enough: Congress should extend the tax credit through September 2010, and broaden it to include individuals who are trading up, as well as first-time home buyers, primary residences only (no vacation homes).