As expected, the end of the tax credit this week has the industry and consumers abuzz. Last month, the April 30th deadline increased sales of newly built single-family homes a whopping 26.9 percent and sales of existing homes surged 6.8 percent. Overall, the tax credit has helped 1.8 million people buy homes. Wow! Yet some experts believe that many of the people who took advantage of the credit would have bought homes anyway. Did you see success in your area with the tax credit? Will the end of the government aid make a difference in your community?
While there was much to celebrate this week, a large number of foreclosed homes are expected to hit later this year: another sobering forecast which indicates that a major recovery is not necessarily imminent. We need to keep motivating homebuyers, especially first-time home buyers, because our industry may be the first indication of how the economy does without government “life support.”
Trying to get the market back on track, the five hardest hit states submitted proposals this week on how they plan to use the $1.5 billion in TARP funds given in housing aid by President Obama. The next five hardest hit states will present similar proposals for $600 million in funds in June. And still other states are perhaps enjoying the downturn, with lower-than-average loan rates. Stay tuned for the economy’s regional comeback stories…
In other good news, remodeling is back! Homeowners who are staying put and those who put remodeling plans on hold due to the recession are now investing in the upkeep of their homes. In fact, the Joint Center for Housing Studies at Harvard University is predicting nearly 5 percent growth in such projects over 2009. This may also be a great investment for homeowners considering that even renting prices are now on the rise.
Lastly, in the coming months, home prices may drop even further. So go take advantage of the increased consumer confidence (which is at its highest level since the financial crisis struck in September 2008!) and let us know your success stories!