This was my fear from the beginning of the tax credit... that it would take future sales and push them up, while sending a bill to my kids and future grandkids... without actually "kickstarting" the market.
We won't know for a few months, when the actual sales are in, but this isn't a good omen.
In a report from the Mortgage Bankers Association, mortgage purchase applications have fallen to a 13 year low. And while the interest rate for 30-year fixed-rate mortgages have declined to the lowest level in six months and remain near historic lows, the low rates are not providing incentive to entice home purchasers. Expectations that the Homebuyer Tax Credit would only “steal” future sales seem to have been correct.
It now seems obvious that the March and April sales “surge” was nothing more than a reaction to “free money,” an incentive that did nothing to stimulate future growth.
The Housing Guru: The expert source for all your housing questions