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.