Consumers can build up credit scores with an eye on real estate credit

10.09.09
By Nicholas Storie

The real estate industry is urging Congress to enact an extension of a popular tax credit that has helped make homes more affordable for first time homebuyers across the country and given consumers more incentive to build up their credit score.

Would-be homebuyers have been scrambling in recent weeks to take advantage of the $8,000 tax credit, which is set to expire on November 30.

The National Association of Realtors has been urging lawmakers to approve an extension of the credit, citing the economic benefits that home sales in general provide, as well as the overall importance of a strong housing sector to what has so far been a slow recovery from the recession.

This week, Joseph Canfora, a regional vice president with the NAR, noted that the credit is thought to have resulted in as many as 400,000 real estate transactions during its existence, which has helped to reduce what had been an extremely high inventory of unsold homes nationwide. Current inventory is said to be around 8.2 months worth of unsold homes, which was the lowest figure recorded since 2007.

The organization also maintains that an average home purchases puts about $63,000 into the economy in the form of various goods and services, sufficient to create about one new job each.

One warning flag cited by the organization is an ongoing stream of foreclosures depressing real estate prices and undermining the economic climate in general.

With these things in mind, the House of Representatives voted this week by a 416-0 margin to extend the tax credit. Whether the Senate will follow suit remains to be seen.

Assuming the tax credit is renewed, first time homebuyers have that much more motivation to work on improving their credit scores to qualify for mortgages and to be able to take advantage of the tax credit and other real estate-related incentives.

More Housing Market Articles | News Home | Discuss in our Forum

Congress may extend a tax credit that has benefited thousands of home buyers.