Time Is Running Out for the Homebuyer Tax Credit
If you want to take advantage of the government's first-time homebuyer tax credit, you must have a contract to purchase a home by the end of this month and complete your sale by the end of June. The program has inspired some 900,000 additional buyers to get into the market, Lawrence Yun, chief economist for the National Association of Realtors trade group, tells The Associated Press. It's also helped stabilize shaky home prices. Yet the $8,000 tax credit for newbies (and $6,500 tax break for homeowners who are moving to another house) has left some analysts fretting that future sales may have been "cannibalized" by the deals, writes The Denver Post. But the more pervasive view is that housing markets are strong enough to stand on their own. March was a strong month for home sales in metro Denver, a trend that is expected to continue through June, says Gary Bauer, an independent real-estate analyst who tracks Denver's housing market: "Is it going to be a fantastic market? No. Will it be a negative market? No, unless something happens." The Realtors association anticipates that home re-sales will rise about seven percent this year (compared with last year), even as credits disappear. Still, interest-rate analysts are cautious about prematurely celebrating any gains in the housing sector. When it comes to interest, "each increase of 1 percentage point in rates adds as much as 19 percent to the total cost of a home," Columbia Business school professor Christopher J. Mayer tells The New York Times. Vanessa Martinez contributed to this post.
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