Sep 25, 2009

Tax credit to grow sales by 334,000

According to a new survey by Zillow, extending the first-time homebuyer tax credit into next year would bring nearly 20 percent more potential homebuyers to the table.

The survey found that, if the credit was extended, of those who plan to buy a home, 18 percent said the $8,000 tax credit would be the "primary influence" in their decision, 25 percent said it would be a "significant influence," and 27 percent said the credit would have "some" influence on any home buying decision. Thirty-one percent said it would have no influence on their decision.

"These numbers suggest that extending the credit might bring an additional 334,000 homebuyers who would not otherwise purchase a home into the market,” Zillow Chief Economist Stan Humphries said in a news release. “While 334,000 may seem like a small number relative to the total number of homebuyers who would claim the credit, their addition to the market next year could make the difference between a robust annual increase in home sales next year and a flat or negative change in home sales relative to this year.”

While the $8,000 first-time homebuyer tax credit is set to expire on Nov. 30 it is hopeful that this would help spur the economy to greater growth even after the incentives are taken away. The hope (in any case of federal support) is that the increase in economic activity will more than offset the lost revenues in income tax to the federal government.

(Home buyers who do not currently own a primary residence and have not owned one for the past three years are eligible)

No comments: