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Will the Administration Bring Back the Homebuyer Tax Credit?

After a worse than expected falloff in home sales during the month of July, buzz about a possible revival of the federal homebuyer tax credit has begun to surface.

The National Association of Realtors (NAR) reported last week that ""sales of previously owned homes"":http://dsnews.comarticles/existing-home-sales-post-worst-showing-in-more-than-decade-2010-08-24 plummeted 27 percent in July, hitting their lowest mark in 15 years. ""New home sales"":http://www.census.gov/const/newressales.pdf also took a dive, dropping nearly 13 percent from June to July.

Both reports were clear indications of the frailty of the housing market post-stimulus. Although, the steep declines were actually considered a by-product of the tax credits themselves, which expired on April 30 â€" payback for the incentives that pulled sales forward into the spring months.

HUD Secretary Shaun Donovan said on _CNN's_ ""State of the Union"" program this weekend, ""The July numbers were worse than we expected, worse than the general market expected, and we are concerned. That's why we are taking additional steps to move forward.""


Donovan said it was too early to say for sure, after only one month's numbers, whether the administration would revive its popular homebuyer tax credits to give the housing markets another much-needed boost, but he didn't wholly rule it out as an option.

""All I can tell you is that we are watching very carefully,"" Donovan told _CNN_. ""We're going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.""

Two U.S. Senate candidates from Florida, one of the hardest hit states by the housing downturn, spoke out in favor of bringing back the federal tax credits for homebuyers on the _CNN_ program.

Florida Gov. Charlie Crist, who is running as an independent for a Florida Senate seat, said a reinstatement of the homebuyer tax break ""would be a great lift"" and ""would stimulate the economy...[and] increase home sales in Florida.""

""People are hurting, and they're looking for answers. And that would be a good one. I would absolutely encourage the president to support [another homebuyer tax credit],"" Crist told _CNN_.

When asked if he was also onboard with renewing the homebuyer tax credit incentive, U.S. Rep. Kendrick Meek, a Democrat running against Crist for the Senate seat, replied ""Absolutely.""

""[I]t was essential to helping individuals buy a home again. That tax credit means an awful lot here in Florida. We need more of it,"" Meet said.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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