Federal Housing Credit Looks To Bring Buyers Out Of The Woodwork
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One of the hats the real estate industry is hoping to turn the market around is the Federal Housing Tax Credit. The $7,500 credit for new home buyers, or those who have not owned a home in the past 3 years, is a great tool to motivate buyers in the slow market.
But the key that we have to look at is financing. I am coming to the realization that housing bubble on it’s own has hit bottom for most of the country. The inventory is being reduced and builders have ramped down significantly.
Now we are entering into a different chapter of the housing slowdown.
This part is predicated on the credit crunch and unemployment. The inability of homeowners to get loans due to tightening credit combined with rising unemployment will do more to hurt housing sales than the price of the home.
So real estate pro’s and homebuilders are hoping the $7,500 housing credit will bring those qualified first time homebuyers into the market.
Lets hope it does…
Its passage hasn’t caused “dancing in the streets,” Litten said. “I think it will stimulate sales,” he said, especially by first-time buyers unsure whether now is the time to purchase a home. “But will it cause a seller’s market and dry up inventory (of homes for sale)? I don’t think so.”
Even the tax credit, for all its attractiveness, has limitations besides the fact that it’s available only to buyers who haven’t owned a home in the last three years. The government requires the credit to be repaid over 15 years, which makes it more of an interest-free loan than an out-and-out credit. via The Indianapolis Star
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Comment by Seanster on 3 October 2008:
“So real estate pro’s and homebuilders are hoping the $7,500 housing credit will bring those qualified first time homebuyers into the market.Lets hope it does…”
I agree on that. With the tightening grip of unemployment, credit, and the likes, all we could do is hope.
Comment by dominican republic real estate on 11 January 2009:
The federal government is meddling with the economy on a scale never before seen. Of course, never before in history have we had a trillion-dollar economy. It remains to be seen if any of the emergency measures implemented by the Fed and Congress will have any lasting effect; one thing remains certain, however.
Obama will have almost carte blanche his first year in office. We have a spending Congress, a nation in crisis, and the world looking for solutions. Interesting times, indeed.
Comment by Idaho Land on 6 April 2009:
This is more than ‘interesting indeed’, it’s just plain scary. Only time will tell, but I don’t see many advantages for the everyday American. Any incentives will eventually end up in the big corporation’s pockets, not ours. But of course, all will be worded to appear to benefit you and me.