Tax Credits/Low Mortgage Rates Boost Home Sales

Reports yesterday [article link] that April brought about the biggest boost in home sales in five months. Low mortgage rates and tax credits were considered to be the main reasons for this surge. Unfortunately for home buyers, the tax credits have now expired. The true rebound (or lack thereof) of the housing market will be foretold in the coming months. With only possible low interest rates luring people, how well will sales go in the next few months?

Truth be told, no one really knows what is going to happen in this volatile housing market. Home sales have been down for so long, even a slight increase over the next couple of months will be cheered. However, according to the linked article, many economists are skeptical the low interest rates alone will push sales in the new homes marketplace. We will see just how strong this "recovering economy," that we hear so much about, truly is this summer. The tax credits are like rebates on new car sales. They are there simply to get the customer into the store. Once they expire, the car dealers struggle once again. I suspect we will see the same thing with the expiration of the tax credits.


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