Any hope many first-time home buyers had of receiving an $8,000 tax credit died along with the  jobs bill that was threatened with a filibuster in the senate last week by 40 Senate Republicans and one Democrat. Bill H.R. 4213 went down by a vote of 57 – 41 in the Senate, failing to reach the 60 votes required to end a filibuster. This effectively killed an amendment to the jobs bill that would have extended the first time homebuyer’s tax credit from its June 30th deadline to September 30th, for any pending sales now under contract. It also killed the extension of unemployment benefits, although lawmakers will probably revive that piece of the bill and attach it to another bill.

Thousands of houses contracted as “short sales” (where the buyer is selling the house for less than what he or she paid for it) and first time home buyer sales will likely fall apart, and no doubt the end of this tax credit will dampen any real estate recovery.  Writes the Associate Press:

The death of the measure meant that more than 200,000 people a week would lose their jobless benefits because they would be unable to reapply for additional tiers of benefits enacted since 2008. People seeking the popular homebuyer tax credit would be denied a paperwork extension approved by the Senate last week. And state and local governments would lose subsidies on bonds they issue to finance infrastructure projects.

If you aren’t buying a home, why should you care? Because the collapse of the housing bubble triggered the worst recession since the Great Depression (and it’s a depression to you if you’re out of a job)! Economists believe the best chance the economy has of turning around is for the real estate market to not only stabilize, but for housing prices to rise. And collapsed home sales mean more houses on the market and lower selling prices.