Deanna and I were at a sales meeting today and an issue was raised regarding the rumor that would raise the first time home buyer tax credit to $15,000.  It seems that some first time home buyers are deciding to wait based upon trying to get a bigger payday after closing.

 

This rumor comes from a June article in the USA today and other publications that references "a want" from the National Association of Realtors and the Builders Associations.  The link attached will take you to the USA today article and you can read it for yourself.
 

 

As you read,  the probablity for increasing the credit is unlikely as we are moving towards recovery and we are trying to raise tax revenues (for this same reason we may not see an extension either!).  The economist quoted doubt the amount will be raised and this is what we are hearing from our sources on the hill as well.

 

Recent new reports point to signs of recovery and statements saying "we should see recovery from the recession in 2010".  These are signals that rates are getting ready to move higher.  This is standard practice in anicipation of economic recovery  (we saw this after 9/11). 

 

The bottom line is congress may extend the tax credit into next year; however, there are no guarentees, most experts agree that raising the tax credit is unlikely. 

Furthermore we should expect to see interest rates begin to rise soon in anticipation of the recovery and anticipation of the Fed running out of funds to keep inerest rates artifically low with its mortgage back securities fund.  All experts in mortgage back securities state there is a threat to higher rates as we pass the half way point in using these Fed funds.  We are nearly to the half way point.

 

Keep getting the good word out on the $8000 but remember for now it still expires at the end of November. 

Our best regards,

The Valeo Croy Team -  Todd Croy, Deanna Valeo and Ryan Minto

(704) 366-7711