In the United States, the GDP recorded 3.5% increase in the third quarter – for the first time in twelve months. This great news also continues within the real estate market, which is now starting to show improvement.
Is our southern neighbour really waking up? Right now, the US housing market is stuck with 7.5 months’ supply of merchandise. There has been great inroads into the extra stock on realtors book’s considering this figure was nearly double at the beginning of the year. Eyes of most real estate agents (but also probable buyers) are now on one thing – the first time home-buyers’ tax credit.
The scope to acquire a $8,000 tax credit (or even cash back, if the recipient’s income tax doesn’t reach this level) has been a powerful energizer for the US real estate market. All good things must come to an end and these tax credits are due to come to an end soon, leading to nervousness amongst the market watchers. What is the following step once these incentives have finished?
All is not lost as an extension bill for the tax credits is being prepared which will delay the cut off for a further year until 2010. Senate has now cleared the way for the law, which may make it to Obama this week or next. The recommendations will bump the couples income threshold to $225,000 and the extension will end on 30 April. As not to miss anyone out there is also a $6,500 tax credit to be attached to the bill for those individuals who want to climb the property ladder.
Potential home purchasers may be pleased with the new bill, it may be the incentive needed to keep the market moving, but how are these incentives going to be financed?