Expiring Tax Credit Making its presence felt
The tax credit set to expire on November 30th for first time homebuyers and those who haven’t owned a home in three years has so far been a strong driver of home sales in markets across the country. Pending home sales have surged for six straight months and economists estimate that the tax credit will generate 400,000 new home and existing home sales.
Activity has been particularly strong for homes priced below $100,000. In the West, the supply of homes priced below $100,000 has dipped to a paltry two month supply where a six month supply is generally considered a healthy balance between buyers and sellers.
Buyers looking to take advantage of the tax credit need to get moving if they want to qualify for the credit before it expires. Loan departments at lending companies are overwhelmed these days with loan modifications and clean-up work, so new purchase activity has seen delays in many areas across the U.S. Buyers hoping to qualify for the credit are advised to get under contract by mid-October to ensure their home closing is complete before the November 30th expiration date.
