There was a lot of buzz today about whether or not the Senate would extend or expand the popular first-time US home buyer’s $8,000 tax credit which is set to expire on November 30th, 2009.

 Several hurdles still must be overcome before it passes, but several law makers are pushing for an extension and possibly an expansion to “step-up” buyers.  There is also talk of increasing the income eligibility for individuals and couples who want to take advantage of the credit.

Many people believe that extending the tax credit is important to continue to stimulate housing. In a very good article in the Washington Post, the authors present a very good articles as to why it potentially is a false stimulus.  They raise the idea that many of these first time home buyers would be buying anyway as they need housing.  They point out that the costs of this tax credit could be spent in many other way to "stimulate" the economy.

In the trenches here is the Phoenix market there is a "micro-frenzy" of home buying.  The majority of clients I am working with would be buying with or without the tax credit so I do wonder if an extension is necessary.  Homes are affordable again and rates are good and many people just want to own a home.  The second home money is very active as well.  2nd home buyers recognize this market as a great time to secure that winter home.

I know many will be excited to see the tax credit deadline extended, but if it is not, I still believe our housing market will continue to stabilize, especially in the first time home buyer price points.  Stay tuned!