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This week last year, the biggest news in housing was all about the Tax Credit expansion and extension.  It went from just being for First Time Home Buyers to allowing existing home owners to get a credit also.

Those credits finally expired in April (with closing mostly by June).

Looking back on the market reports for the last year, the effect of the tax credits is pretty obvious.  And I wouldn’t call it all a good thing.  There certainly was an increase in closed sales leading up to the original June deadline.  But, there was a VERY sharp fall off in almost all markets in July through September (and more current data isn’t available yet).  Sales were well below last year for the same periods.  Of course, there was another tax credit at that time, so it may be hard to judge.

The fear for those of us in the real estate business that weren’t thrilled with the credit was that it was “stealing buyers from the future”.  It wasn’t creating new buyers, but just altering the time table.  That theory is borne out by the data we’ve seen so far… sales dumped after the credit expired.

For those that pushed for the credit, there was an expectation that it would “jump-start” the housing market.  It did, but as soon as the cables came off, we saw that the battery was still dead…

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Personally, I am of the opinion that the way to boost the housing market is with sustainable private sector jobs.  When people aren’t worried about the pay check next month, they are more likely to think about buying a home.

However, right now, interest rates are amazing and home prices are too.  I have been in a few homes in the last couple of weeks with prices that were just shockingly low.  And my mortgage guy is working on a loan for someone WITHOUT perfect credit with a rate in the low 4% range…  Another client (with EXCELLENT credit and a 15 year loan) was in the high 3% range.  (Please keep in mind that there are a LOT of variables that determine your interest rate… talk with a mortgage pro).

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