Will the Real Estate Recovery End With the Expiration of the Tax Credit?

The first time home buyer tax credit is nearing expiration. Homes must be placed under contract by the last day of April in order to qualify for the popular home buying incentive. Although congress renewed the program when it was first set to expire last fall, it seems unlikely that another renewal is on the horizon. Economic indicators have been generally more positive over the last few months and the growing deficit will likely sway lawmakers toward allowing the credit to expire. So what happens to our housing market as a result?

I predict that we won’t see much of a change. Surprised? Well, no doubt that the tax credit has encouraged some buyers to move off the fence and get into home ownership, but the truth is, it just encouraged them to do it sooner than they would’ve otherwise. Home buying season is here and if folks are interested in purchasing a home, they’ll do it with or without a tax credit. There are significant opportunities for buyers that are currently searching for Branson homes for sale as the “buyer’s market” conditions continue to prevail.

I think of it like a car dealer’s “cash back” incentive. Once the incentive is over, will you decide not to buy a car because you missed out? Of course not. If your transmission is out or your family needs a bigger car, you’ll make the purchase because it’s the right decision for you, not because of a special offer.

A home purchase is far too big a decision to make on the basis of a cash prize.

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