U.S. realtors say tax credit spurred home sales
WASHINGTON - The percentage of homes bought in the United States by first-time buyers rose significantly in the year through June, helped by a popular $8,000 tax credit, the National Association of Realtors said on Friday.
About 47 percent of all sales were made by first-time homebuyers in the twelve months through June, up from 41 percent in the 2008 period, the group said, citing a survey of 120,000 homebuyers and sellers. The survey generated some 9,000 usable responses.
The group expects somewhere between 2.3 million and 2.4 million first-time homebuyers for all of 2009.
NAR spokesman Walt Maloney estimated about 400,000 of those sales were strictly a result of the tax credit, which Congress recently extended through April 2010 and expanded to trade-up buyers.
Without it, inventory would be much higher and we wouldn't be seeing signs of price stabilization, Maloney said.
The group sees about 5.01 million units of existing homes sold in 2009, about 2.0 percent higher than last year. The realtors are predicting about 5.69 million units sold in 2010, or about 13.6 percent higher than this year.
NAR chief economist Lawrence Yun said U.S. housing inventory levels have been steadily falling.
With expansion of the tax credit to additional buyers through the middle of next year and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences, Yun said.
Critics question the taxpayer value of the first-time homebuyer credit, noting that about 2 million of the 2.4 million sales would have happened anyway.
They also say the $6,500 tax credit for trade-up buyers is even less effective, since the trade-up homes are generally more expensive and the benefit as a percentage of the purchase price is smaller.