Has the first-time buyer tax credit really worked?

This broker’s opinion is…NO. Although a number of buyers did want to take advantage of the $8K tax credit, most of the purchased homes were at the lowest levels of the market and would probably have taken place anyway. The real failure of the program is that these sales resulted in very few “trickle up” sales. Traditionally, when a seller sells their property in an entry level price bracket they take that equity and buy something else, bigger and more expensive. What has actually happened is that these sellers lost all their equity and did not buy anything. They are generally renting until they can get their finances back to a level where they can again enter the housing market. Some even had to move in with family. Nice try but we need much more help than this to precipitate a faster market rebound.

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