How will the extended and expanded homebuyer tax credit impact housing?

• We applaud Congress and President Obama for passing the Worker, Homeownership, and Business Assistance Act of 2009.  The ensuing tax credits for first-time homebuyers, which is an extension of the popular plan that was set to expire on November 30, and move-up buyers is the true definition of stimulus.  According to NAR, approximately $63,000 is put back into the local economy for every home sold.  Economist Mark Zandi of economy.com believes that figure to be about $56,000.
• The first-time tax credit was working, but what housing and our national economy needed was incentive for the move-up buyer.
• The first-time homebuyer’s tax credit remains at $8,000 for most buyers who have not owned a home the previous three years who have a signed sales contract prior to May 1, 2010 and close before July 1, 2010.  The new plan also allows for a higher cap of $125,000 income for singles and $225,000 for married couples. 
• Current homeowners who have lived in their homes for five consecutive years over the previous eight years, can take advantage of a tax credit of up to $6500 for the purchase of their next primary residence of up to $800,000.  Again, the contract must be signed before May 1,2010 and the deal closed before July 1, 2010.