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A 3.5% rise for the third quarter, in the GDP, is brilliant news for the United States economy. This fantastic news also continues within the housing market, which is now starting to show improvement. Is the United States finally on the road to recovery? There is still a large surplus of housing stock available, approximately 8 months worth. This sounds like quite a lot, but in contrast to January’s 12.4 months’ supply, it is a big improvement. Eyes of all real estate agents (but also probable buyers) are now on one thing – the first time home-buyers’ tax credit. The opportunity to be awarded a $8,000 tax credit (or even cash back, if the recipient’s income tax doesn’t reach this level) has been a powerful stimulant for the US real estate market. However there is now ripples of nervousness running through those watching the market, as the availability of these credits is due to finish. What will ensue once the tax credit is no longer on offer? All is not lost as an extension bill for the tax credits is being written which will prolong the deadline for a further year until 2010. Senate has already cleared the way for the law, which may arrive with Obama this week or next. With a new deadline of April 30, and an rise to $225,000 on the couples income threshold, this is a very attractive bill. And that’s not everything – a new $6,500 tax credit for move-up homeowners was linked to the bill. Potential property 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 subsidized?
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tax credit, US, real estate,
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