Lately, real estate agents have been working seven days a week while builders have been staying open late as new and returning homebuyers scramble to get their offers in on time to take advantage of the two federal tax credits that will expire tonight at midnight.
In order for buyers to qualify for these tax credits a signed contract has to be turned in by midnight tonight and escrow must close by June 30th.
Both of the tax incentives have fueled a very strong spring selling season and in turn have helped to stabilize home prices around the nation. Real estate agents hope that strong spring selling will help push the housing market for several more months and hopefully to the end of the year.
In an effort to bring the housing market back to life Congress included the original new home-buyer temporary tax credit in the $787 billion stimulus package that President Obama signed into law right after he took office and after intense lobbying from the real estate industry he agreed to extend the credit to the end of April.
According to the Internal Revenue Service, to date, close to 2 million households have used the credit at a cost of $12.6 billion.
The first-time home buyer's tax credit has seemed to have played a bigger role in stimulating home sales this spring with sales of new homes surging to 27 percent in March, compared to only 7 percent of previously occupied homes. March which was the biggest monthly increase in 47 years.
Unfortunately, many analysts have predicted that sales will drop sharply in the second half of the year after the tax credits are gone. Some economists even expect home prices to fall again as well, and if mortgage rates rise again there could be a new wave of foreclosed homes hitting the market.
Only time will tell what the impact will be once these tax credits expire. However, no matter what, the housing market seems to finally be securing its footing after the worst downturn since the Depression in the 1930's.