Extend the homebuyer tax credit

Home sales always are a key economic indicator. During times of prosperity, the housing market booms. And as anyone who has tried to sell a house during times of recession can tell you, when the economy struggles, housing struggles.

There are many reasons for this, from the practical (if you're out of work, you're not apt to have the wherewithal to make a major purchase) to the emotional (few people go into an investment this sizable without confidence in the future).

Beyond all that, home construction and home sales have an indisputable impact on the local economy. They create jobs and income.

Home sales drive the local economy and drive consumer confidence.

And this year, they are providing the glimmer of hope for the nation's economic recovery.

The U.S. Commerce Department reported that in July, existing home sales rose 7.2 percent to the highest levels in almost two years and new home sales rose 9.6 percent. The three-year erosion in market value of homes finally ended in May, according to the S&P/Case-Shiller Index, and home values have actually started to inch up again.

This encouraging recovery is vitally important news for all of us, and a big factor in it is the $8,000 first-time homebuyer's tax credit, a part of the federal economic stimulus package approved earlier this year.

"It is having impact in lifting sales and reducing inventory, which will help stabilize home prices," Lawrence Yun, chief economist for the National Association of Realtors, told Bloomberg News. "Stabilizing home prices is key to economic recovery because that means bank balance sheets will not bleed and consumer confidence will improve."

He estimated that 350,000 home sales through August were directly attributable to the tax credit.

But that stimulus is scheduled to expire at the end of November.

On Friday, Rep. Bill Foster of Geneva banged the drums to extend it. Foster said the tax credit is a major reason why moderately-priced homes have seen an uptick in sales recently and that now is not the time to slam the door on that progress.

Clearly, the extension is receiving considerable attention in Congress. A bill to extend the credit for a year for service veterans was passed unanimously in the House last week, and several proposals to extend or even expand the current program for first-time buyers have been introduced.

Given the depth of the government's debt, it's difficult to get excited about any additional spending.

But this is a program that is working. And in doing so, it's helping get the economy back on track. We agree that the tax credit should be extended.