by Bill McBride on 10/27/2009 06:03:00 PM
Tuesday, October 27, 2009
UPDATE: I was told this is a done deal, but I haven't seen an announcement yet - so it might still change. The tax credit was expanded to move-up and higher income buyers. The amount of the credit was reduced to a maximum of $7,290.
From Bloomberg: Senate Close to Deal Replacing Homebuyer Tax Credit
This is obviously bad economics, but it must be good politics. The first-time home buyer impact will fade (and will probably cost over $100,000 per additional home sold). The move-up portion will probably be even less effective.
Apparently this tax credit will be combined with the extension of the unemployment benefits to avoid a veto (the real reason the extension was being held up).