That provides a happy July 4 weekend to the homebuyers in process, all of whom have been in contract since April 30. Most of them have been waiting two months or more for lenders to approve short sales. Those buyers now have until September 30 to finish their closings in order to claim the tax credit of up to $8,000.
Note that the credit has not been extended for new buyers.
As I've previously reported, the government has found a number of instances of fraud in claims for the credit -- including multiple claims for the same address and claims by jailbirds serving life sentences -- but the great majority of claimants are simply honest people trying to buy new homes.
The National Association of Realtors (of which I'm a member) had estimated that the most populous states would be the hardest hit, with perhaps 17,700 buyers in California, 15,340 buyers in Texas, and 14,830 buyers in Florida caught in the pinch.
The legislation will also help ease the bottleneck for new homeowners who might be trying to get loans as all these backed-up closings are being processed.
On that note, mortgage rates hit historic lows of 4.58 percent on 30-year-fixed loans, notes Nick Timiraos of the Wall Street Journal. Rates on 5/1 adjustable mortgages dropped to 3.79 percent. How low is that? Well, it's down 16 basis points from the 3.95 percent that caused me to write a "Hey, Mortgage Rates are at Historic Lows" column two months ago.
Consumer confidence is still shaky, so I don't think we'll see a spurt of new homebuying, but if you're one of the few people who's at a fixed rate of about 6 percent or higher, it might be time to refi.