NCPA - National Center for Policy Analysis


June 29, 2010

Home shoppers who missed the April 30 deadline for a housing tax credit might have the last laugh.  For a variety of reasons, they could end up saving more than the $8,000 they could have received from the tax credit, says the Columbus Dispatch. 

For example: 

  • In some Ohio neighborhoods and price ranges, sellers are dropping their prices because buyers are harder to find now that the credit has expired.
  • Builders and real-estate companies began offering promotions after the tax credit ended that, in many cases, are worth more than the credit.
  • Interest rates have dropped enough since the credit deadline that, over the life of a loan, a homeowner could easily save more than the value of the credit. 

Home sales leapt in March and April during the waning weeks of the credit, especially for homes priced at less than $200,000, which appealed to first-time homebuyers.  Since the credit expired, home contracts and building permits have tapered off, leaving sellers with fewer buyers and, in some cases, little choice but to cut their price, says the Dispatch: 

  • According to the real estate website, which tracks price reductions, 30 percent of central Ohio homes for sale on May 1 had reduced their asking price -- more than in April or March.
  • Other builders are offering free appliances, trade-in programs, rebates and "sweat-equity" discounts that allow a homeowner to drop the price by painting, landscaping or otherwise helping to finish their home. 

Source: Jim Weiker, "Sometimes, it pays to delay;" Columbus Dispatch, June 27, 2010. 

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