Senators agreed on Wednesday to extend the popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.  The current $8,000 first-time homebuyers tax credit is set to expire at the end of November.

The agreement in the Senate extends the existing tax credit for first-time homebuyers while also offering a reduced credit of up to $6,500 tax credit to repeat buyers who have owned their current homes for at least five years.

These tax credits would be available to homebuyers who sign sales agreements by the end of April.  They would have until the end of June to close on their new homes.

September saw a 3.6 percent fall in new home sales…the first time it fell since March.  Many feel that it was the uncertainty of the tax credit that made new home sales fall in September.

It takes 45-60 days to close on a house, making it unlikely that a sale made today would qualify for the current tax credit which has a deadline of the end of November.

About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

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