I was asked recently if there was any further talk of extending the Federal tax credits to home buyers. The previous tax credits were set to expire last November, 2009, but were extended until this past April 30, 2010; at that time a second credit, for current homeowners, was added. It's now May 11 and those tax credits have expired and there is no talk of any further tax credits. Some of the reading I have been doing suggests that the expiration will not have much of an effect on home sales.
Prudential Real Estate and Relocation Services, Inc. did a survey of people currently looking for a home and found that 65% of these people felt the expiration of the credits would have little or no affect on their purchasing a home. Additionally, the survey found that rising mortgage interest rates and unemployment were of more concern to them, as well as the stricter lending criteria.
Prudential also surveyed current renters and found that 75% still feel that owning a home is better than renting in the long term, and that over 70% found home ownership to be a better investment than stocks, bonds, mutual funds or savings accounts.
All of this is good news for home sellers, as it means people are still out there looking to buy homes, particularly with the current combination of low interest rates and lower housing prices. Additionally, REALTOR(R) Magazine reports that three big real estate companies are offering their own variety of incentives for buyers - Century 21 (the franchise where I currently work) is offering an $8,000 List Your Home Sweepstakes, Coldwell Banker has a Buyer Bonus Sales Event and Re/Max says some of its clients are offering things such as free appliances.
If you are a buyer, missing out on the tax credit is too bad; on the other hand, prices are lower and interest continue to be low, so it's still a good time to think about buying a property. If you are thinking of selling, it seems clear the lack of a tax credit is not going to hinder sales.