Here we are, two weeks before Christmas, and many people are asking if the Home Buyer Tax Credit, now extended and expanded, has helped to revive the real estate market.
The Home Buyer Tax Credit was due to expire at the end of November so September and October saw what seems was a "rush" to get in on the action. Even since the Tax Credit inception, sales have posted increasing numbers for the last 9 months. October 2009 numbers show an increase of 10% over September 2009. October 2009 was over 24% higher than October of 2008. That is substantial!
On November 6, 2009, the Tax Credit was extended to April 30, 2010 or at least have a valid contract in place by that date and close by June 30, 2010. The Tax Credit was also expanded to include qualifying repeat buyers. These buyers could also realize a tax credit up to $6500. Since the primary numbers of growth we have seen thus far were from First Time Homebuyers, this "Repeat Home Buyer Tax credit" will hopefully encourage the next higher tier of homes to move in stronger numbers.
Since the pressure is off the deadline, the seasonal slow down is expected to resume for now and into January. Then we expect a good bit of home purchasing action into the end of the first quarter and second quarter of 2010.
One last consideration-mortgage rates. Now at levels below 5%, this will not last forever. Interest rates are expected to jump in February and March and that will reduce the affordability of homes.
I recommend not waiting until the last minute to take advantage of this unique opportunity. Too many things can go wrong in a transation. If a deal falls apart at the last minute, it may be too late to find another home and close in time. Rates can go up, opportunities go away. Start getting financing in order and begin shopping now so you can be ahead of the game and not lose out!