I discussed a recent article in the wall street journal that casts some light on why we won’t see an federal tax extension but also stress why it’s still a good time to buy a house.
Hello and welcome everybody to another episode of The Reside Daily Bite; I’m your host, David Doucette. Today, I’m going to talk to you about an article that came out in the Wall Street Journal last week called “Tax Credit Extension? Don’t Bet the House on It” and as you recall a few daily bites ago, we talked about the federal tax credit and the unlikelihood that it will be extended. Let’s talk a little more about that. I just want to expand on it because I thought the article was interesting.
It starts by saying, “The National Association of Realtors touted Thursday’s report that existing home sales rose by 6.8% in March as proof that the home buyer tax credit has been a “resounding success.” Indeed, home resales, which came in at a 5.35 million annual rate, exceeded analysts’ consensus expectations of a 5.25 million annual sales rate.” -if that’s interesting to you. “But there was another message embedded in Thursday’s report: Don’t count on any further extension of the home buyer tax credit, which expires at the end of April.”
And they also talked about…”Industry officials are optimistic that low mortgage rates, improved housing affordability and the continued availability of low down-payment mortgages from the Federal Housing Administration (or the FHA) will be enough to keep buyers in the game during the second half of the year.” That’s what I wanted to really mention here because we talked about the likelihood of the tax credit not being extended. But, it really is still a good time to buy -if you’re in the market for purchasing a home. Interest rates are at a historic low; we know they’re going to be going up by the end of the year (again, we don’t know how much).
The low down payment mortgages, the Federal Housing Administration currently to 3.5% downpayment requirement. There’s talk about that going up and if you’ve been watching the daily bites, I’ve talked about this before; I’ve podcasted about this on The Reside Realtor Online Radio Show (about the cost of waiting). So, it is still a good time to buy even though the federal tax credit is no longer available. If you’re in California, we do have the California tax credit which began on May 1st but that is expected to be depleted in the next couple of weeks as I reported a couple of weeks ago on the Reside Daily Bite. I haven’t actually heard any new information or any new statistics on that but I expect to be hearing something soon and of course, when I do, you will be the first to hear it from me.
So, that is really going to cover it today. Again, the federal tax credit is not extended at this point (as of May 5th) but still a good time to buy.
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