After the global economic crisis, that was initiated by the subprime loan mortgage crisis, home prices across the US started to plummet. In an effort to stem the fall in house rates, the US government launched an incentive for people to purchase a house for the first time.
Known as the first time home buyer tax credit period, it encouraged potential buyers to go ahead with a buy by providing a tax credit of up to $8,000, for anybody who was under contract before April 2010. Such was the success of the first time home buyer tax credit period which not only did it help to stem the drop in prices, but it also helped prices rise.
Till the end of April 2010 things were looking pretty good in the US property market. With the nation looking to see recovery from the financial crisis, high house sales figures were leading the path. The figures weren't quite as impressive as they first seemed though because once the tax credit was no longer available; the market reacted by seeing house prices fall again. It became obvious that the high sales figures in the early part of the year in fact reflected the fact that many home buyers were simply bringing forward their choice to buy a home forward from later in the year.
With house prices falling yet again, several individuals are asking when the first time home buyer tax credit period might be reinstated to give the market a increase once more.
Several feel that the tax credit gives false market figures and does not aid to stabilize the economy in the long term, whilst costing the government much needed tax revenue. Even though people are likely to be in favor of such an advantage, many market experts feel that the market ought to be allowed to adjust naturally, and that if house rates are going to plummet then they must be allowed to do so. Once the market has bottomed out, then buyers who are waiting for the best price might begin buying again that would permit the market to recover.
It is even thought that the incentive was wide open to fraud, with practically tens of thousands of claims being made by individuals who weren't even buying a property. With a legislation that is so open to abuse, its clear to see why lawmakers may to be reluctant to reintroduce the incentive.
It is also understood that with re elections looming, politicians are likely to be concentrating on more sensitive issues such as the war in Afghanistan in order to win as much votes as possible. With opinion divided on whether or not the tax credit is a genuine advantage to the economy, such a problem is likely to take a back seat till the re-elections are out of the way.
So it'll appear as if those who are looking to buy a house should not depend too much on the first time home buyer tax credit being reinstated any time soon. Even though its still a tonic which the government can use to give the housing market a boost should it be required.
Known as the first time home buyer tax credit period, it encouraged potential buyers to go ahead with a buy by providing a tax credit of up to $8,000, for anybody who was under contract before April 2010. Such was the success of the first time home buyer tax credit period which not only did it help to stem the drop in prices, but it also helped prices rise.
Till the end of April 2010 things were looking pretty good in the US property market. With the nation looking to see recovery from the financial crisis, high house sales figures were leading the path. The figures weren't quite as impressive as they first seemed though because once the tax credit was no longer available; the market reacted by seeing house prices fall again. It became obvious that the high sales figures in the early part of the year in fact reflected the fact that many home buyers were simply bringing forward their choice to buy a home forward from later in the year.
With house prices falling yet again, several individuals are asking when the first time home buyer tax credit period might be reinstated to give the market a increase once more.
Several feel that the tax credit gives false market figures and does not aid to stabilize the economy in the long term, whilst costing the government much needed tax revenue. Even though people are likely to be in favor of such an advantage, many market experts feel that the market ought to be allowed to adjust naturally, and that if house rates are going to plummet then they must be allowed to do so. Once the market has bottomed out, then buyers who are waiting for the best price might begin buying again that would permit the market to recover.
It is even thought that the incentive was wide open to fraud, with practically tens of thousands of claims being made by individuals who weren't even buying a property. With a legislation that is so open to abuse, its clear to see why lawmakers may to be reluctant to reintroduce the incentive.
It is also understood that with re elections looming, politicians are likely to be concentrating on more sensitive issues such as the war in Afghanistan in order to win as much votes as possible. With opinion divided on whether or not the tax credit is a genuine advantage to the economy, such a problem is likely to take a back seat till the re-elections are out of the way.
So it'll appear as if those who are looking to buy a house should not depend too much on the first time home buyer tax credit being reinstated any time soon. Even though its still a tonic which the government can use to give the housing market a boost should it be required.
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