It looks like the sales of new homes have dropped last month due to the effects of the temporary tax credit for first-time owners are slowly vanishing. It is the first decline since March of this year. Despite that though sales are up 22 percent from the bottom in January. As we all know it is taking longer to close a transaction this year because its taking longer to get approved for a mortgage and to have a property appraised.
I believe the power of the first-time homebuyers tax credit demonstrates its power. The economy is just not back to where it is without having the housing market needing any support. I am hoping Congress extends the tax credit through the end of next yr, if its not extended then I think it would be a dramatic and significant effect. I know many believe it is an unnecessary subsidy for people who don't need it, but what else has worked, or is working? Who can deny that low mortgage rates, the tax credit and homes that are now more affordable did not give a big boost and lift to the housing market this year? Something needs to be done now in my opinion or we are going to be in for a long long down spiraling fall.
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