Bigger Tax Credit = More Home Sales?
Apparently low interest rates and reduced home prices aren’t enough incentive to get consumers to purchase new homes.
A recent survey by Weichert Realtors shows that increasing the tax credit for homebuyers to $15,000 and extending it to all buyers — not just first-time purchasers — will get more people to jump off the fence and buy a home.
Groups representing Realtors and homebuilders have been pushing lawmakers to boost and expand the tax credit to stimulate the housing market.
“The tax credit would increase home sales, which would cause inventories to fall and stabilize home prices and mortgage markets,” National Association of Home Builders First Vice President told a Congressional committee.
But will throwing extra cash at more consumers really be the key to help revive home sales?
I’m guessing that factors like job losses and business growth are more critical to the health of the overall housing market.
If a buyer doesn’t know how secure his job is, his appetite for committing to a hefty new loan isn’t going to be great.
Meanwhile, the current tax credit and favorable interest rates have done little to spur more home sales here in Massachusetts.
The Warren Group reported this week that home sales in May dropped to 3,256 their lowest level for the month since 1990.
Source: Warren Group/Banker & Tradesman