Survey Undermines Importance Of First-Time Homebuyers Credit

With the fate of the stimulus bill in the hands of Congress, a vast majority of people in the real estate industry are touting the benefits of the …

With the fate of the stimulus bill in the hands of Congress, a vast majority of people in the real estate industry are touting the benefits of the first-time homebuyer program, and even urging its extension to current homeowners. Yet a Zillow poll disputes the extent of the credit’s impact, indicating that for a significant number of buyers continuation of the incentive would not be a factor in their purchasing decision. For more on this, see the following article from Property Wire.

As US politicians prepare to debate the future of incentives to boost the real estate industry the latest surveys show that estate agents want them to continue but buyers say they make little difference to them.

Many experts have said that the $8,000 first time buyer tax credit, which is due to finish at the end of November, has had a major impact on the property market.

A bill to extend the programme is currently before the US Senate.

Realtors are backing an extension. In a poll by real estate company Weichert 71% said that the homebuyer tax credit was the single largest factor motivating buyers in 2009.

As well as continuing with the stimulus, they also want more potential buyers to be able to benefit.

The majority, some 92%, said the market will decline if the tax credit expires at the end of November while 97% want it to continue to the end of 2010.

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The survey also showed that 20% felt affordable home prices were the biggest motivating factor and 8% indicated low interest rates played a major role.

‘The tax credit is working to restore confidence and stimulating the overall economy but we still have a long way to go before we return to a normal market.

As this survey shows, many in our industry are concerned that we will lose much of the ground that has been made toward a recovery if the tax credit is not extended,’ said president James Weichert.

Agents that responded to the survey also indicated expanding the credit to existing homebuyers and not just first-time buyers would further stimulate the housing market and higher-priced properties in particular.

But it would appear that property buyers don’t agree.

A survey from zillow.com found that a third of prospective first-time homebuyers said an extension of the tax credit would have no influence on their decision to buy in 2010.

In the survey of adults who qualify for the credit, 18% said extending the credit until the end of 2010 would be the main influence in their decision to purchase a home.

An additional 25% said it would be a significant influence, 27% said it would have some influence, and 31% said it would have no influence.

If the credit were extended, Zillow predicts that 1.86 million homebuyers would take advantage of the program and that would cost around $14.86 billion.

The National Association of Realtors is in favor of an extension.

‘The credit needs to be available for an additional period of time in order to sustain the progress that’s been made so we can continue to see our markets fully recover.

Uncertainty about the future of the credit will dampen consumer demand.

The only way we can assure that the progress we’ve made can continue is to extend the credit and to do that now,’ said NAR president Charles McMillan.

This article has been republished from Property Wire. You can also view this article at
Property Wire, an international real estate news site.

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