Big Bump in July Housing Sales
The federal government's $8,000 tax credit for first-time home buyers appears to be doing its job: according to NAR, sales of single-family homes increased 7.2% in July from a month earlier.
So, what will happen come Nov. 30, when the credit is set to expire?
I'm hearing -- and reading -- increasing speculation that the credit will be extended, or even increased.
While that would provide continued support for the housing market, especially at the low end, policymakers have to be careful about any such extension.
That's because prospective buyers who are expecting even bigger carrots down the road are likely to wait rather than buy now.
Showing posts with label $8000 tax credit. Show all posts
Showing posts with label $8000 tax credit. Show all posts
Saturday, August 22, 2009
Friday, March 20, 2009
$8,000 Tax Credit Q & A
Today's Wall Street Journal has a nice Q & A discussing eligibility requirements for the $8,000 tax credit. Hint: it's more complicated than you think.
Here's the link: "Cracking a Valuable Home Buyer Credit"
Here's the link: "Cracking a Valuable Home Buyer Credit"
Thursday, March 19, 2009
$8,000 and 4%
Housing's "Big Two" Numbers
Two numbers loom especially large in the national housing market right now: $8,000, and 4%.
The first number is the tax credit available to eligible home buyers. Coincidentally or not, that's approximately what annual payments come to on an average-priced U.S. home (now about $175,00).
To balky Buyers who've been waiting for an irresistible deal, the government is basically saying, "how about free housing for a year? Is free cheap enough??" (Again, you have to qualify, so not all Buyers will get such an attractive deal.)
The second number, 4%, is the whispered target number for 30-year mortgages.
Whether they get there or not depends.
Based solely on yesterday's announcement that the Fed will buy up to $1 trillion in mortgage-related securities, rates instantly fell about .25%, from 4 7/8% to 4 5/8%.
Whether they keep dropping depends on how quickly the Fed deploys the money, and whether all that new money (literally) isn't negated by inflationary concerns.
Observers will recall a similar rate drop last Fall, after a similar (but smaller) announced Fed stimulus. In that case, the drop turned out be short-lived when the promised money didn't materialize (or at least not fast enough for the market).
Two numbers loom especially large in the national housing market right now: $8,000, and 4%.
The first number is the tax credit available to eligible home buyers. Coincidentally or not, that's approximately what annual payments come to on an average-priced U.S. home (now about $175,00).
To balky Buyers who've been waiting for an irresistible deal, the government is basically saying, "how about free housing for a year? Is free cheap enough??" (Again, you have to qualify, so not all Buyers will get such an attractive deal.)
The second number, 4%, is the whispered target number for 30-year mortgages.
Whether they get there or not depends.
Based solely on yesterday's announcement that the Fed will buy up to $1 trillion in mortgage-related securities, rates instantly fell about .25%, from 4 7/8% to 4 5/8%.
Whether they keep dropping depends on how quickly the Fed deploys the money, and whether all that new money (literally) isn't negated by inflationary concerns.
Observers will recall a similar rate drop last Fall, after a similar (but smaller) announced Fed stimulus. In that case, the drop turned out be short-lived when the promised money didn't materialize (or at least not fast enough for the market).
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