The Home Buyers Tax Credit has come up in the news and in discussions again. It seems to be an addiction and such talk could further hurt our economy. You might ask, how is this? Just thinking about this, could keep potential home buyers on the fence longer. If a buyer could imagine our awesome government handing out more money, our money, the tax payers money, why not wait 3 to 6 months, right? Everyone loves free money, I know I do. But at whose expense?
As we know, elections are around the corner. Are some politicians just using such talk for voting bait? I would think so.... With home sales being down in some parts of the country, some seem to think that the Home Buyers Tax Credit could be the answer. Fox News reported some of this the other day. Home Sales remain dismal : Bring back the home buyers tax credit - The article starts of by stating that since the tax credit was introduced in 2008, that is has helped 3.3 million home buyers. But wait, at a cost of 23.5 billion dollars. Rut row.... And another thing, out of those 3.3 million home buyers, how many were going to buy anyhow? To me, those are blanket statements that can be very misleading.
Nick Timiraos wrote, Ignore talks of a Housing tax credit 'Revival'. Nick's article resembles my same thoughts. He even mentions that the final bill for these tax credits could be as high as 30 billion dollars. And 30 billion dollars got us what?? My whole problem with a lot of this is that it seems that none of this was ever thought out properly. That we just signed blank checks in 'hope' of stimulating the economy, not thinking out any and all repercussions. I posted some different ideas here on how we can try to help fix this economy... You want the Home Buyers Tax Credit back??? and here... Call to action - We must fix teh real estate market ourselves
In my opinion, what has happened is that we have artificially stimulated the economy with these tax credits. And from what I can see, it really hasn't helped much. We need to stop fooling ourselves and let the market correct itself on its own. About a year ago, I wrote several posts stating that I heard individual home buyers committing fraud and how this would hurt us financially. The government at the time had no real checks and balances in preventing such a huge mistake. Well, a month later, reports came out of such fraudulent claims. Again, we are suppose to have some powerful minds above average minds on Capital Hill, yet we think about this stuff after it happens.
Conclusion : I won't deny that the home buyers tax credit helped in some cases. But if I properly calculate such figures, I would say it only truly got 3 percent to 8 percent more buyers out on the streets that would have never bought. Some will argue this, but we need to look at the final results. Has this put us in more debt for a longer period of time? I think so. And with such chatter coming up again, as I mentioned, this could put some buyers back on the fence.
Let's look at the facts. Rates are historically the lowest since Fannie Mae started keeping records in 1971. You can get a mortgage rate from 4.00 percent to 4.75 percent, depending on your credit scores and down payment. Home values in many places have dropped significantly in the last several years. In my opinion, if you can actually buy now, don't roll the dice. If you are financially comfortable, don't listen to those housing gurus predicting that home values will drop some more. And ignore those talks about the home buyers tax credit. Just my humble opinion. What is your opinion?
Jim Lee wrote this, Congratulations, you missed the $8,000 Tax credit - I think this was a good post because it just showed you basic math on what would happen if you missed the so-called tax credit boat. Again, just my opinion.