Tuesday, September 7, 2010
Home prices gain 3.6% in past year
Even the home prices show signs of stabilizing, better shape than it was last year, it is expected that they will fall in the next few months or even in a year. The demand for home is a lot weaker as anyone that could buy a house already has already bought one and those that can't aren't. Aside from the unemployment rate, and bank repossessions of foreclosed properties, the tax credit might somewhat contributes to the falling of home prices. The tax credit did indeed spur sales but it also made home values drop more than they should have during the period following the expiration. With every percentage drop in home values, we just added more foreclosures and upside down homeowners in the future which seemingly does nothing but extend this mess even further out.
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2 comments:
I agree JP, the tax credit was a huge bonus while it existed and home sales definitely increased, but now that it has ended home purchases have plummeted again. I think the best solution would be to keep extending the tax credit as long as needed until we are able to survive without it.
I think the government would have extended the tax credit if it had more funds. With the current deficits, I dont think it will do. They would have to find another way that are as effective and more stable than the tax credit plan.
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