As we get into the fall of the year and time to capitalize on the first time home buyer tax credit is waning, many are speculating as to whether or not Congress should extend the tax credit or let it expire on December 1, 2009. The debate has been whether or not there has been any real economic growth from this “give away” or whether it has been just more sunk money spent by Congress in an attempt to win favors. 
The Internal Revenue Service reports that so far 1.4 million families have benefitted from the $8,000 first-time home buyer tax credit. Projections reveal that between 1.8 to 2 million first-time buyers will take advantage of the tax credit this year, and economists estimate that approximately 350,000 of those sales were motivated exclusively because of the incentive.
The tax credit has proven to be an extremely popular incentive. It targets first-time home buyers, who currently represent about 30 percent of current market activity. In addition to benefiting buyers who take advantage of it, the tax credit also contributes to the overall health of the U.S. economy. Economists estimate that each home sale pumps an additional $63,000 into the national economy which also reveals that the housing market is vital to the survival of many different industries. The retail of goods and services like carpeting, furniture, appliances, title companies and insurance, just to name a few, depend on a healthy housing market.
The figures mentioned above would mean that for the $16 billion pumped into the tax credit from Uncle Sam, the result thus far has been a $22 billion stimulus into the economy. Not a bad return on investment!
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