Monday, July 6, 2009
The release of the new federal tax credit given to first-time home buyers have certainly jazzed up the real estate market. The tax credit, amounting to $8,000, gave a boost to real estate agencies and home buyers; a good boost after all the foreclosure news that has bombarded the national media since 2008.
A lot of people took advantage of this opportunity to buy their first homes. Especially for the current generation in which most of them are just renting apartments in big cities. This resulted to the rise in sales of new and existing homes. Some cities in the country, like Kansas, have reported a 10 percent increase in home purchases since March of this year. This increase is driven by both the tax credit and low mortgage rates in the market. But the tax credit is only going to be available for first-time homebuyers who could complete the purchase until December 1st. Many are already currently making offers because it usually takes a month or two to close the deal.
Pending home sales in the US, in general, have increased 6.7 percent in April compared to March. According to the National Association of Realtors, this has been the biggest increase in the sales contract index since October 2001. Somehow, foreclosure news was overshadowed by these positive numbers in the recent months.
However, economists are suggesting that we are still far from being out of the woods. With the average rate of about 5.3 percent for mortgages on a 30-year fixed rate, owning a home is still a bit too much for many borrowers. Although we are seeing some positive recovery, they cautioned that it will take longer for prices to stabilize due to the surplus of properties that are not sold. Unless foreclosures decline, home prices will likely to rise until 2011.
But the tax credit provided by the government is somehow slowly achieving its aim. Seeing the increase of sales from first-time buyers, other people may follow soon. This is also backed up by the increase of loan activity of up to 50 percent on some banks.
Unless the government finds a way to lower interest rates on mortgages, the tax credit incentive can only go so far. If we could find a solution for this, maybe there will be less and less foreclosure news in the future.
Source: http://www.bestforeclosurenews.com/foreclosure-news/tax-credit-for-homebuyers
A lot of people took advantage of this opportunity to buy their first homes. Especially for the current generation in which most of them are just renting apartments in big cities. This resulted to the rise in sales of new and existing homes. Some cities in the country, like Kansas, have reported a 10 percent increase in home purchases since March of this year. This increase is driven by both the tax credit and low mortgage rates in the market. But the tax credit is only going to be available for first-time homebuyers who could complete the purchase until December 1st. Many are already currently making offers because it usually takes a month or two to close the deal.
Pending home sales in the US, in general, have increased 6.7 percent in April compared to March. According to the National Association of Realtors, this has been the biggest increase in the sales contract index since October 2001. Somehow, foreclosure news was overshadowed by these positive numbers in the recent months.
However, economists are suggesting that we are still far from being out of the woods. With the average rate of about 5.3 percent for mortgages on a 30-year fixed rate, owning a home is still a bit too much for many borrowers. Although we are seeing some positive recovery, they cautioned that it will take longer for prices to stabilize due to the surplus of properties that are not sold. Unless foreclosures decline, home prices will likely to rise until 2011.
But the tax credit provided by the government is somehow slowly achieving its aim. Seeing the increase of sales from first-time buyers, other people may follow soon. This is also backed up by the increase of loan activity of up to 50 percent on some banks.
Unless the government finds a way to lower interest rates on mortgages, the tax credit incentive can only go so far. If we could find a solution for this, maybe there will be less and less foreclosure news in the future.
Source: http://www.bestforeclosurenews.com/foreclosure-news/tax-credit-for-homebuyers
posted by Avoid foreclosure, We buy houses, Stop foreclosure
@ 8:08 AM
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