Since the expiration of the tax credit, mortgage rates have dropped precipitously.
Palm Coast, FL – November 4, 2010 – Most home buyers and potential buyers in the last year were aware of the first-time home buyer tax credit. Most home buyers—nearly 80 percent—were also eligible for the credit. That opportunity for nearly all buyers has now ended; however, there is an exception for overseas military personnel and Federal employees. See the IRS’s First-Time Homebuyer Credit: Members of the Military and Certain Other Federal Employees for details if you think your buyer might qualify.
Home sales fell steeply in July after the credit ended, as shown in the figure below. Recent existing-home sales data shows that they have climbed back up through the end of September, and were only 14 percent below the June sales rate. Considering that many of these current buyers may have been tax credit eligible had they purchased a few months earlier, one might wonder why they are buying now.