St Louis Home Loan Experts Are Calling the Home Buyer’s Tax Credit a Failure

Posted on April 16, 2010
Filed Under Tax Credits | Leave a Comment

The United States has been arguably experiencing not only a stale real estate market, but the highest unemployment rate since the Great Depression of 1929.

So, with unemployment hovering at around 10 percent, St Louis mortgage experts had high hopes that the home buyer’s tax credit bailout plan that was instituted would stimulate housing demand in this already decimated market.

When both party sides as well as professionals in the mortgage real estate industry began to see this catastrophic loan modification fiasco unraveling before their eyes, little did they realize that the federal tax credit stimulus would end up meeting a very similar fate to that of the previously mentioned program.

St Louis refinancing and lending experts are now further agitated by the possibility that a large number of discounted homes will soon be hitting the real estate market which may aggravate this already deteriorating market.

There seems to be a gloomy type of atmosphere that is hovering over this decimated real estate market frankly due to there being no sign of any upsurge in the demand for buying homes or refinancing. And for those hoping to see some kind of extension as regards the tax credit program, think again.

“No one is saying that they need to buy before the tax credit expires,” said Tim Surratt, a real estate agent. But ironically, that seems to be one of the biggest mistakes going for this sinking market.

Some experts are saying that the size of the tax credit at $6,500 to $8000 is actually too small to influence buyers to make any kind of immediate buying decision.

Although the amount that the tax credit gives to the homeowner appears to be enough to entice anyone to buy a house now, it does not provide substantial savings to cover the down payment or commissions to agents.

Let’s take for example a house that is priced at $164,000. If the real estate agent’s commission is at 6 percent, the amount paid would be $9840. In this case, as it would for most transactions, the expenses would be much higher than the $6500 to $8000 being offered.

I think Roberton Williams at the Tax Policy Center said it well: “You’ve got a really big problem that requires big guns, and the tax credit is just not big enough.”

Cynacism has a way of bringing alternative solutions to the fore. Many are now criticizing how much time and money was spent on the controversial health care package when instead more money should have been appropriated to the tax credit program. This may have helped jumpstart the economy.

Now it appears when things couldn’t get much worse, the social security system will no doubt need an emergency cash infusion sooner than later. Perhaps past failures will be a lesson for this new conquest.

Learn more about St Louis lending and call 877-334-0210 or 314-334-0210 (24 Hours). Stop by Floyd J. Tapia’s site where you can find out all about a St Louis Refinancing loan and what it can do for you.

Comments

Leave a Reply