Many first-time home buyers decided to take advantage of the expiring tax credit. Add in low mortgage rates with falling prices and the home sales in October were their highest level in 2 1/2 years. As a result, home sales are 37 percent above from their bottom in January.
Now that the tax credit has been extended and expanded to include more than just first-timers, the housing market is expected to be sustained next year.
The economy as a whole will benefit only slightly from higher home sales due to weak home construction, rising foreclosures and slow job creation.
The government is trying to keep mortgage rates around 5% and they are extending the tax credit for buyers. The idea is to counter-act the still falling home prices due to foreclosure after foreclosure being put on the market.
The October report of home sales reflects the offers made previous to the tax credit extension. This shows that the credit really did it's job. Sales traditionally drop during the winter but the extended credit could mean great things for home sales in spring!
http://www.msnbc.msn.com/id/34105403/ns/business-real_estate/
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