The June 30 expiration of the tax credit deadline–which had originally been scheduled for November 30, 2009–applied to contracts written by April 30, and, according to NAR, it is conceivable that as many as 180,000 homebuyers who signed contracts by that date may have missed the June 30 closing. However, the consumers are not necessarily at fault here. NAR contends that many closings have been delayed due to the onslaught of buyers, slow processing of short sales, and a more extensive loan underwriting process.

The statistics illustrate the impact. In May, NAR’s Pending Home Sales Index declined 30 percent from April. “Consumers are rational and they rushed to meet the tax credit eligibility deadline in April,” NAR chief economist Lawrence Yun, said in a prepared statement. “The sharp decline in contract signings in May is a natural result.”

More of the same had been forecasted for the months of July and August, but that changed when the U.S. Congress passed a bill extending the program after hours on Wednesday, June 30. The legislation pushes back the closing deadline for buyers with contracts dated no later than April 30 to September 30. Only time will tell how the new September 30 tax credit deadline will effect pending home sales.

The current deadline requires buyers to close by June 30 in order to qualify.

The Senate must still approve the measure. Supporters there are planning to tack the bill onto one that would extend unemployment benefits, hoping the popularity of the tax credit extension will overcome Senate objections to extending unemployment.

Practitioners estimate that at least 200,000 buyers won’t be able to close today because settlement offices are slammed, short sales are delayed,and lenders are overwhelmed.

Critics say extending the deadline is an invitation for more fraud.

Included in that number are thousands of home buyers in every state of the union, from 390 in Wyoming to 17,700 in California, according to estimates by the National Association of REALTORS®.

“We are strongly urging the Senate and the House to act quickly to pass this legislation and ease the minds and pocketbooks of these home buyers,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.

“These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a workflow jam with lenders or other delays such as lapses in the National Flood Insurance Program, Rural Housing Service, and new home construction, and might not be able to complete the purchase of their homes by the current deadline,” said Golder. “It would be a tragedy for them not to be able to complete the purchase in time to claim the credit.”

NAR issued the following state-by-state estimate of the number of home sales that would be delayed beyond the June 30 deadline; numbers are rounded to the nearest 10:

Alabama, 2,590; Alaska, 830; Arizona, 5,440; Arkansas, 2,090; California, 17,700; Colorado, 3,390; Connecticut, 1,770; Delaware, 400; District of Columbia, 300; Florida, 14,830; Georgia, 6,270; Hawaii, 710; Idaho, 1,270; Illinois, 7,030; Indiana, 3,560; Iowa, 2, 030; Kansas, 1,840; Kentucky, 2,540; Louisiana,1,800; Maine, 840; Maryland, 2,630; Massachusetts, 3,930; Michigan, 6,470; Minnesota, 3,760; Mississippi, 1,530; Missouri, 3,600; Montana, 760; Nebraska, 1,110; Nevada, 3,800; New Hampshire, 690; New Jersey, 4,300; New Mexico, 1,160; New York, 9,190; North Carolina, 4,890; North Dakota, 460; Ohio, 8,510; Oklahoma, 2,760; Oregon, 2,090; Pennsylvania, 5,830; Rhode Island, 500; South Carolina, 2,460; South Dakota, 500; Tennessee, 3,910; Texas, 15,340; Utah, 1,130; Vermont, 400; Virginia, 3,890; Washington, 3,190; West Virginia, 940; Wisconsin, 2,690; and Wyoming, 390.

The issue particularly affects owners of partially built condo developments. In many cases, developers have held property for several years while shifting the taxes and other costs for the unfinished part of the project to the condo association.

Jack Levine, who represents the Wisconsin chapter of the Community Associations Institute, says, “What the decision effectively says is that every unit declared, whether built or not, has a share of responsibility. I think it’s good news [for condo owners] and it will have an impact.”

To close on a sale, builders in most parts of the U.S. must obtain a certificate of occupancy that attests that the home is finished and conforms to building codes. Also, mortgage lenders usually require that document to close.

To make the deadline, builders are hiring. The jobless rate in the construction industry fell to 20 percent in May from a high of 27 percent in February, according to the Bureau of Labor Statistics.

June 10, 2010 – WASHINGTON – Homebuyers may get an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.

Senate Majority Leader Harry Reid, D-Nev., said Thursday he wants to give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The proposal would only allow people who already have signed contracts to finish at the later date.

Reid introduced the proposal as an amendment to a bill that would extend jobless benefits through the end of November. Joining him were Sen. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn.

Reid, who faces perhaps the toughest re-election campaign of his political career, represents a state that has the nation’s highest foreclosure rate.

The National Association of Realtors has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.

“Time is of the essence,” said Lucian Salvant, a spokesman for the group. “It’s important for Congress to get this done, because there’s whole bunch of loans that aren’t’ going to close on time.”

First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

JMP Securities analyst James Wilson says sales activities in California, Texas, and Arizona are approaching pre-April numbers in many markets. In some markets, builders are able to continue to raise prices and homes are selling at the strongest pace since before spring 2009, he says.

Wilson said he expects home sales to continue to be up and down, but he believes that the market has already hit bottom and is on the upswing.

June 2, 2010 – WASHINGTON – A rush of homebuyers aiming to meet a deadline to qualify for a federal tax credit pushed the number of signed sales contracts to the highest level since October.

The National Association of Realtors said Wednesday its seasonally adjusted index of sales agreements for previously occupied homes rose 6 percent in April from a month earlier to a reading of 110.9. March’s reading was revised upward to 104.6.

The rise marked the third consecutive month of increases, all of them aided by federal tax credits of up to $8,000.

But the tax credits expired on April 30. Many analysts expect sales to drop in the coming months.

Even though mortgage rates are near record lows and home prices have declined dramatically, potential buyers are unlikely to act if they don’t have jobs or fear that their jobs are in jeopardy.

“Clearly, the race to meet the tax credit deadline has left the home-buying pipeline rather empty, and we fear that still high unemployment, heavy indebtedness and tight credit will mean that it stays that way,” wrote Paul Dales, U.S. economist with Capital Economics.

Evidence of a slowing market was apparent Wednesday when the Mortgage Bankers Association released a weekly report on applications to purchase homes. Applications fell for the fourth-straight week to the lowest level since April 1997. Plus, foreclosures are still at extraordinary levels, which is likely to push down home prices in the second half of the year.

Investors, however, seemed pleased with the April rise in pending home sales. The Dow Jones industrial average rose more than 60 points in early trading.

Some analysts are less fearful than others. Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote that he expects “a gentle recovery once the plunge following the end of the tax credit is over.”

The Realtors index provides an early measurement of sales activity because there is usually a one- to two- month lag between a sales contract and a completed deal. A reading of 100 is equal to the average level of sales activity in 2001, when the index started.

Congress included a temporary tax credit to boost home sales in the $787 billion stimulus package signed into law a month after President Barack Obama took office. The idea was to bring the housing market back to life. Lawmakers, after intense lobbying from the real estate industry, agreed last fall to extend it and expand it to more buyers.

First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500. To qualify, buyers had to have a signed sales contract by April 30 and must close the sale by the end of this month.

About 2.6 million households had used the credit as of late April at a cost of $18.7 billion, according to the Internal Revenue Service.

The biggest boost for pending sales was in the Northeast, where sales rose nearly 30 percent. Sales were up 7.5 percent in the West and about 4 percent in the Midwest. They fell 0.6 percent in the South.

“Clearly the home buyer tax credit program, which concluded at the end of April, was successful in getting the housing market moving again by helping many families achieve the dream of homeownership,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Now that the program is over, other great buying incentives continue – including exceptionally favorable mortgage rates, very attractive home prices and the steadily improving economy – so there is good reason to expect the positive momentum to continue.”

“The surge of buying activity we have seen in the final two months of the tax credit program has been very encouraging, and has helped builders work down their standing inventories to near historic lows,” said NAHB Chief Economist David Crowe. “It stands to reason that this activity will level off over the next few months, as sales that would have occurred during that time were likely pulled forward to meet the April deadline. That said, today’s favorable home buying conditions, the recovering job market and reviving consumer confidence should help take the place of tax incentives to generate buyer demand.”

Three out of four regions posted substantial gains in new-home sales in April; the Midwest registered a 31.6 percent gain, the South, a 10.8 percent gain, and the West, a 21.7 percent gain. The Northeast posted no change in sales activity from the previous month.

The nationwide inventory of new homes on the market fell 5.8 percent to 212,000 units in April, its slimmest measure since October of 1968. Meanwhile, the month’s supply at the current sales pace declined from 6.2 in March to a modest 5.0 in April, the lowest since November of 2005.

The law provides qualified service members who served on official extended duty outside of the United States for 90 days or more at any time between January 1, 2009, to April 30, 2010, another year to buy a home and claim the credit. They have until April 30, 2011, to sign a sales contract, and until June 30, 2011, to settle and close on the home. Both the $8,000 first-time and $6,500 repeat home buyer tax credits are included in the rule.

“Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas,” said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Michigan. “It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country.”

“Qualified service members” are defined as a member of the uniformed services of the United States military, a member of the Foreign Service of the United States, or an employee of the intelligence community.

The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they have to sell their home due to receiving government orders for extended duty service.

NAHB provides information on the home buyer tax credit, including eligibility requirements and links to home buying resources, on its consumer website www.FederalHousingTaxCredit.com.