Check out the latest from the respected Economists of the National Association of Home Builders:

Home Buyer Tax Credit Brings Hope to Housing

The housing market received what should prove to be a real boost when, earlier this month, Congress and the President extended the first-time home buyer tax credit that was set to expire on Nov. 30 into the spring and expanded it to include eligible move-up or repeat home buyers.

First-time home buyers will now be eligible for the tax credit if they sign a contract by April 30, 2010, and settle on their home no later than June 30. Likewise, move-up/repeat home buyers (existing home owners) who have lived in their primary residence for five of the last eight years will now be eligible for a tax credit of up to $6,500. (more)

Housing Still Faces Significant Headwinds

The housing market still faces significant headwinds, even as they begin to abate.

The Federal Reserve’s October Senior Loan Officer Opinion Survey on Bank Lending Practices revealed that the majority of banks are continuing to tighten lending standards for mortgages, as they have every quarter for the last four years.

However, the tightening is significantly below its peak in July 2008. Most banks this quarter reported that they neither tightened nor loosened their standards, those that tightened them reported raising their standards only somewhat and one bank reported that it had loosened its standard for issuing prime mortgages somewhat. (more)

As Housing Improves, Nonresidential Construction Struggles

Private nonresidential construction fell 7.6% from September 2008 to September 2009 according to the Census Bureau’s Value of Construction Put in Place data, which are not adjusted for inflation. Construction of office space was down 25.1%, while commercial construction — which includes restaurants, retail space and warehouses — was down 31.6%.

While single-family home construction was up 2.4% in September from the month before, production was down 47.6% from September 2008.

Multifamily construction, which faces stiff competition from the single-family market and significant obstacles to obtaining financing, decreased 4.1% in September from August. Compared to September 2008, construction was down 28.9%. (more)

Tough Times for the Rental Market

The rental vacancy rate rose to 11.1% in the third quarter — the highest reported since the Census Bureau began compiling it in 1960 — and up from 9.9% in the third quarter of 2008.

The number of units for rent that are vacant year-round rose from just under 4 million units in third quarter 2008 to 4.6 million units in third quarter 2009. These figures include apartments and single-family homes for rent. The glut undoubtedly includes for-sale units that could not sell and were eventually placed in the rental market — creating more pressure for the market. (more)

UPDATED NOVEMBER 7TH.

The first time home buyers Federal tax credit has been extended and expanded by the Senate and House and on Friday November 6th the President signed the bill. The new law will extend the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Further, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new principal residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their principal residence for five consecutive years out of the last eight. Additionally, the income eligibility limits to claim the full credit amount for both groups of home buyers have been raised to $125,000 for individuals and $225,000 for married couples. For more information about the credit go to Federal Home Buyer Tax Credit website and the Federal Tax Credit Fact Sheet from NAHB.

Your purchase of a newly constructed home may be eligible for a state tax credit of up to $5,000 on your Kentucky tax return. Any attached or detached home that has never been occupied qualifies. Credit expires July 25, 2010 for home sales closed on or prior to this date or until the $25 million dollar limit has been reached. For more information check out the Kentucky Department of Revenue website.

BOLD Homes has two homes ready for immediate occupancy and will match your Federal or State tax credit dollars. Contact Mike Kegley for more details at 859-657-6700.

THIS WILL BE THE LAST CHANCE TO USE THE TAX CREDIT

Even as Congress neared completion this week on legislation to extend and enhance the home buyer tax credit, proponents of the tax credit made it perfectly clear that the extension would have a limited shelf life and not be extended again when it expires next year.

Sen. Johnny Isakson (R-Ga.), a long-time champion of the home buyer tax credit, said: “This is the last extension of the home buyer tax credit. Tax credits like this only work by creating the sense of urgency to take advantage of it, and to bring the market back.”

On the floor of the Senate, Finance Committee Chairman Max Baucus (D-Mont.) said that, “It’s important that this tax credit does not become a permanent fixture in the tax code. Our amendment would end the credit on April 30 of next year. This extension would get us through the winter – traditionally the worst season for real estate. Our amendment would jump-start the housing market as it enters the summer months of 2010.” Baucus added that the seven-month extension of the tax credit would be “long enough to encourage home buyers to buy homes, but it’s short enough to remain fiscally responsible.”

MORE TO FOLLOW

Check back to this posting for the latest updated information on both tax credits.