Tag Archives: Homebuyer Tax Credit

Home prices across the country slipped in August, Standard & Poor's reported Tuesday. The agency's closely-watched gauge of residential property values recorded a 0.1 percent drop in the composite reading of 10 cities tracked, while the 20-city composite posted a 0.2 percent decline. Home prices decreased in 15 of the survey's 20 metropolitan statistical areas on a month-to-month basis. Only Chicago, Detroit, Las Vegas, New York, and Washington D.C. posted what S&P called ""marginal improvements.""

Home prices in the United States found their floor during the early part of 2010 and are expected to begin trending upward next year, according to a panel of elite economists surveyed by the National Association for Business Economics. They are projecting gains in home prices of 1.2 percent over the course of 2011. ""The housing recovery is intact, but tepid overall. Home prices have hit bottom,"" according to the group of economists.

Home prices rose again in July, according to one of the industry's most closely watched gauges of property value trends. The S&P/Case Shiller Home Price Indices released Tuesday showed a 0.6 percent increase in the average price of a single-family home across the 20 major U.S. cities included in the study. S&P says, though, that annual growth rates have slowed considerably. During the month of July, 16 of the 20 metros saw their annual gains retreat.

Economic growth is still grinding along, but has slowed considerably since earlier in the year, according to the Federal Reserve's popular Beige Book report released Wednesday. Reports from the 12 Fed districts on their local economies painted a picture of ""widespread signs of a deceleration."" Real estate remains a drag on economic growth in regions across the country, with major trouble spots identified in poor home sales and weak demand for commercial space.

The three versions of the homebuyer tax credit are expected to result in revenue losses to the federal government of about $22 billion, according to estimates just released by the Government Accountability Office (GAO). Looking at Internal Revenue Service (IRS) filings through July 3, homebuyers so far have claimed $23.5 billion under the housing stimulus provisions, about a third of which was in the form of interest-free loans that will eventually have to be repaid. California ranks first among the states, with the most homebuyer tax credit dollars claimed.

In the first quarter of 2010, state housing finance agencies' (HFAs) delinquencies declined for the first time since overall performance of loans began to deteriorate in the second quarter of 2008, according to Standard & Poor's. But the agency's analysts say the slowdown could be only temporary. S&P's study shows delinquency rates for HFA loans remain high relative to a year ago. However, the percentage of HFA loans at least 60 days past due or in foreclosure decreased to 6.05 percent in Q1, down from 6.57 percent in the fourth quarter of 2009.

Home prices rose in June for the third consecutive month - a precipitate of the homebuyer tax credit that sparked a flurry of purchase activity in the spring. Buyer demand, though, has now dropped off substantially, and it's a trend that will likely rob the market of the recent rebound in home prices. According to the S&P/Case-Shiller index released Tuesday, home prices rose 1.0 percent in June compared to May. While June itself was positive, growth rates have already decelerated in 14 of the 20 metros included in S&P's study.

Freddie Mac released the results of its second quarter Conventional Mortgage Home Price Index (CMHPI) Monday. The index measures property values based on home loans originated in Q2 and purchased by Freddie and its sibling mortgage financier Fannie Mae. The CMHPI Purchase-Only Series for the United States registered a 3.1 percent increase in the second quarter relative to the first quarter. For the first time since the second quarter of 2009, prices rose in all nine Census divisions.

After a worse than expected falloff in home sales during the month of July, buzz about a possible revival of the federal homebuyer tax credit has begun to surface. Sales of previously owned homes plummeted 27 percent last month, hitting their lowest mark in 15 years. New home sales also took a dive, dropping nearly 13 percent. HUD Secretary Shaun Donovan says the July numbers were worse than was expected and are cause for concern, and he's not ruling out a return of the tax credit incentives.