U.S. Senate extends home tax credit

14:46, June 17, 2010      

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The U.S. Senate on Wednesday approved a plan to extend a tax incentive program for new homebuyers in an effort to boost the still troubling housing market.

The plan, approved by a vote of 60-37, would give homebuyers extra three months until Sept. 30 to finish qualifying their purchases for tax credits of up to 8,000 dollars. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

First-time buyers were eligible for a tax credit of up to 8,000 dollars. Current owners who bought and moved into another home could qualify for a credit of up to 6,500 dollars.

Recent data showed that this policy was the major engine for the U.S. housing market this spring.

However, market experts forecast that home selling will fall in the coming months without the policy.

According to a report released on Wednesday by the Commerce Department, U.S. housing construction in May declined 10 percent, and new building permits also fell sharply.

Economists say that the May housing market data reflected homebuilders are feeling less confident in the recovery now that government incentives for buyers have expired.

The U.S. Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month.

The burst of the housing bubble in December 2007 triggered the global financial crisis that plunged the U.S. economy into recession.

Many economists believe that the U.S. housing market remains in the woods.

Source: Xinhua


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