Pending Home Sales for July increased by 3.2%, more than double the expectations of 1.5%, and representing the sixth consecutive monthly gain…the longest streak on record. In this article, we will discuss Pending Home Sales Up Again!
While it’s nice to finally hear some positive news about the housing sector – let’s remain cautious in our optimism, as many first time homebuyers moved up their home purchasing plans to take advantage of the Federal tax credit (according to the Mortgage Market Guide).
This temporary stimulus may mean a corresponding dip in Home Sales data once the credit expires. That said – combined with still historically low rates and a large inventory, this report is a great talking point to help more of those first time homebuyers get off the fence and into application.
Keep in mind when you are talking with first time buyers, if you use the term “tax credit” they may not understand what it is. The way I explain it is this:
“This tax credit is like winning the lottery with an $8,000 payout. The Federal Government will write you a check for up to $8,000! It’s even better than lottery winnings as those are taxed. This tax credit is not. So long as you own and occupy the house for 3 years, you never have to pay it back.”
Hurry, as the number of mortgage applications are going to create bottlenecks with lenders trying to process loan applications later this Fall. The deadline for receiving the tax credit is November 30, 2009, so buyers must close by then. Get your buyers under contract and have them start the loan application process.
Let me know how I can help!
Certified Mortgage Planning Specialist
WC Mortgage & Financial Services, LLC
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