Members of the legislative body have come to an agreement regarding extending a tax credit made available to first-time homebuyers. The original version of the tax credit gave homebuyers $8,000 for buying their first home and was slated to end at the end of November.
Now, according to the agreement, the tax credit will be extended and expanded. First-time homebuyers will be able to get the credit through April 30. Furthermore, people who have lived in their homes for five years will be offered a $6,500 tax credit as a result of the agreement.
A joint statement from Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan noted that the tax credit has helped people into new homes and increased home prices.
"These three measures will help support our efforts to stabilize the housing market by providing support for the recovery in housing prices, keeping mortgage rates low, and helping people who can afford their homes to avoid foreclosure," Geithner said.
The possibility of the tax credit coming to an end was cited as a reason why home sales dropped in September. The U.S. Department of Commerce noted that home sales for the month came in at an annual rate of 402,000, or a 3.6 percent drop.
