The real estate market is waiting in anticipation for the law makers to decide to extend or not to extend the $8,000 first time home buyers’ tax credit.  As of this Monday, the House of Representatives voted on a bill that would extend the tax credit to military personnel who have served more than 90 days overseas within the 2009 calendar year.  The bill must now be passed to the Senate for a vote where it is believed to pass without problem.  The question now is if the law makers will extend and expand the credit to everyone else.  Currently Congress has drafted more than 20 bills that address the extension as well as the expansion of the tax credit.  Some bills have lifted the “first-time home buyer” phrase and instead offered the tax credit to all but the wealthiest Americans.  Other bills have expanded the credit from $8,000 to $15,000 and extend the deadline 6 or 12 months.   While the specifics of a final bill are unclear, it seems very plausible that an extension or expansion for all U.S. residence will get a ruling very soon.

Those in favor of the extension and expansion believe the tax credit will continue to help stabilize our housing market by allowing certain home buyers to enter the market whom otherwise without the credit would not.  Political analyst Paul Begala predicts the extension will occur in part due to the feelings of the American people.  Many Americans have watched in frustration while large corporations received large sums government bailout money, yet the average American has not seen a penny. 

Mark Zandi, chief economist of MoodysEconomy.com, believes that the extension of the tax credit would benefit the market.  Forecast show that foreclosures are expected to rise next year due to unemployment numbers.  Zandi believes the tax credit will help mute the decline in foreclosures.  

"The most fundamental argument for the credit is that nothing works in the economy if housing is falling -- it hurts household wealth and credit becomes tight," Zandi said. "[The credit] is a good insurance policy. It's vital to stem the housing price declines."

Those who are opposed to the extension and expansion of the tax credit believe the credit is a waste of government money.  Currently, the tax credit has only enticed 15% of all home buyers into the market.  The remaining 85% of buyers would have bought a house with or without the tax credit.  Opponents also believe that an extension would only temporarily boost home prices and potentially set up those using the credit for a fall.  Once the credit eventually expires, home prices are likely to fall and interest rates will creep higher. 

While there are those on both sides of the fence, the ultimate goal is to help stabilize our countries housing market.  Keep your eye on the housing news because we should be seeing a ruling on this subject very soon.