In hopes of supporting home sales across the nation, the federal government extended their home buyer’s tax credit program last fall to last until April 30th; and while the government would like to see their tax credit programs helping to support the incidence of home sales, in many areas it is evident that this trend is just not coming to fruition.
There are many factors that are keeping the rate of home sales down that can’t be completely offset just by the offering of the home buyers’ tax credit. Across the nation, unemployment rates are still sitting at very high levels, while many people who are working are sadly under employed and making less money than they were when the recession first hit. It is reasonable to assume that even if the government promises to give you a tax break for buying a home in this economic climate, you have to be reasonably unscathed by the current recession to actually be able to take them up on that offer.
Many current home owners who are actually in a position to take advantage of the program and would like to take advantage of the tax credit for home buyers, are struggling to sell their own homes so that they can take advantage of low interest rates, depressed prices, and an excess of available inventory. As a result, many of the people who are buying homes currently are first time buyers; they don’t have homes that need to be sold to be able to finance a home purchase, after all. Unfortunately, the numbers of people who can afford to buy their first home aren’t high enough to support the market in a big way.
Experts say that one of the biggest factors in many areas across the nation is the lack of consumer confidence; unfortunately, confidence in the market isn’t something that can be bought with a tax credit or even with lower interest rates. For the return of consumer confidence, only time will tell what works; it does not seem that government spending is helping to bring back this confidence to the nation. Whether or not the weeks preceding the cut off date of April 30th will see an increase in home buying or not, as we saw in the weeks before the original November 30th cut off date for the tax credit.
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