WCAX.COM Local Vermont News, Weather and Sports-Welch Wants to Extend Home Buyer Program

Welch Wants to Extend Home Buyer Program

Essex, Vermont - October 6, 2009

When Matt and Lindsey Wignall first saw their Essex townhouse, they knew they wanted to call it home.

"We walked in and I kind of grabbed my husband's arm and said, 'Can we make this happen? I really want to live here!'" Lindsey recalled.

An $8,000 tax credit from the federal stimulus package helped make it happen.

"With the tax credit we decided to jump right in," Matt said. "We would probably be renting right now without it and taken our time to buy a house. We wouldn't be here."

The IRS says nationwide, about 1.4 million home buyers have taken advantage of the tax credit. Economists say about 375,000 of them would not have bought homes without it. Vermont realtors say the local housing market has shown the same trend.

"We believe about 25-percent of the purchasers who've benefited from the tax credit would not have gotten into the market this year if this had not been an incentive in place for them," said Leslee MacKenzie, president of Coldwell Banker Hickok & Boardman Realty. "In our company alone, over half our buyers were first-time buyers. That's up. Two years ago it would have been about 35-percent of our business, so that's a big increase."

But potential home buyers may be running out of time. Right now the tax credit is set to expire on November 30. Because a closing can take about six weeks, realtors say potential buyers really only have a week or so to sign a contract.

"We're really anxious to see this bill extended," MacKenzie said. "We believe it's made a big impact on the real estate market."

Representative Peter Welch is co-sponsoring legislation that would extend the tax credit for another 13 months. He says the program has cost $15 billion so far, and estimates the extension would cost another $15 billion. But there would be money to pay for it.

"There's two things," he said. "There was the stimulus plan, and not all that money has been allocated. So why not allocate it to a program that's clearly working? That's number one. Second, we're getting repaid on some of the TARP funds. That's the money to the banks, with interest. So there's earnings coming back into the Treasury. Why not use some of that to help our home buyers and stimulate the economy?"

Welch says the credit has also stabilized the housing market and created jobs for the construction industry. But with unemployment still rising, some say ending the credit now could jeopardize that recovery.

"If this isn't extended, we think there are buyers who would just wait for a little more certainty in the economy," MacKenzie said.

Realtors also say ending the credit now would be especially bad timing, winter tends to be the weakest season for the local housing market.

Kate Duffy - WCAX-TV