Home Prices and Interest Rates May Offset Loss of Tax Credits

61 Percent of Those Looking for or Considering Buying a Home Had No Plans to Use the Tax Credit

Dennis Norman

According to a survey from Better Homes and Gardens Real Estate, the majority of people looking for, or considering buying, a home had no plans to take advantage of the First-Time or Move-Up/Repeat Home Buyer Tax Credits.

The survey, which was conducted online during the last week of February 2010, was designed to identify factors affecting today’s home buying decisions. Respondents were people from across the country who were searching for a new home, saving up to buy a home or who recently purchased a new home.

Of the respondents that said they were looking for or considering buying a home, nearly two-thirds (63 percent) said they believe it is a “buyer’s market,” more than half (54 percent) feel that mortgage rates are affordable, and 70 percent indicate that there are affordable homes on the market. Just about half (49 percent) feel that the economy gives them the ability to negotiate more than usual. However, only 39 percent surveyed said they had planned to take advantage of the tax credit before it expired on April 30, 2010.

“There has been a lot of speculation about the housing market after the tax credit extension expired,” said Sherry Chris, president and CEO of Better Homes and Gardens Real Estate. “The tax credit was truly a great motivating factor, with many home buyers taking advantage. However, we found that the tax credit was only one motivation. People buy homes for lifestyle reasons as well and I suspect that the normal seasonality patterns of home buying will still play out now that the tax credit has expired.”

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