Real estate agents and mortgage brokers have noticed a sudden increase in the number of people who want to buy a house. This is because the first time homebuyer tax credit scheme is drawing to a close, and people have less than two weeks left to finalize their contracts for purchasing a house.
Many home buyers are rushing to finish all the formalities and documentation, even though the majority of people who wanted to avail of the tax credit have already purchased new houses. It is expected that activity in the home market will soar this month as first-time buyers and trade-up buyers race to meet the tax credit deadlines.
The home buyer tax credit was introduced by the Obama administration during the economic crisis to boost the real estate market. The scheme was extended in November and will now be closing by April 30th. If you want to take advantage of this opportunity, you should act quickly because a binding sales agreement would be required by April 30th to qualify for the credit. Further, you will have to make the purchase by June 30th. For current homeowners, there is a tax credit of $6,500 for purchasing a new house, if they have lived in their current house for a minimum of five years.
Individuals earning up to $125,000 and couples earning up to $225,000 are eligible for the credit. Earlier, the limits were $75,000 for individuals and $150,000 for couples.
It would be interesting to see if the housing market is able to sustain itself without the stimulus package. The tax credit scheme had been a major factor in the recovery of the housing. It might have even had an indirect impact on other economic sectors. This is because various markets related to housing also benefited from this program.
There is still a chance of some other stimulus scheme by the government if the market falters. Many people are still wary of buying a house, as they are scared of being suddenly laid off and having to pay a huge mortgage loan.
However, some real estate analysts say that prices will stabilize and the housing market will be able to stay out of trouble even after withdrawal of the stimulus package. They point out to the fact that a lot of expensive property is being sold currently and that not all deals are for first-time buyers.