Home shoppers who missed the April 30 deadline for the Homebuyer Tax Credit ($8,000 tax refund for first time buyers) may be getting the better end of the deal after all. For a variety of reasons, home buyers could now save much more than the $8,000 tax refund.
For starters, in some neighborhoods and price ranges, sellers are dropping their prices because buyers are now harder to find; this has to do in part with the homebuyer tax credit expiring. During March and April, home sales increased drastically since buyers were scrambling to make the deadline for the tax credit. Since this has expired, home contracts and building permits have dwindled, leaving sellers with fewer buyers and the need to cut their prices. In fact, in Bryan and College Station alone, 59 sellers have reduced the asking price on their homes since May 1st.
Additionally, some builders and real estate agencies began offering promotions after the tax credit ended in an effort to reel buyers in. Further, summer prices on homes are traditionally less expensive as home buyers would like to move during the summer before school starts up.
And as an extra incentive, interest rates have dropped enough since the credit deadline that, over the life of a loan, a homeowner could easily save more than the amount of the credit. Though a drop of half a point since the end of April may not seem like much, it is huge in reality. Consider this: the buyer of a $180,000 home borrows $173,700 in mid-April at an interest rate of 5.125%. They would end up paying $377,442 over the next 30 years. That is $15,000 more than they would pay if they borrowed last week at an interest rate of 4.75%.
Though the homebuyer tax credit was highly publicized, it was certainly not the best deal of the season, nor was it the best time to buy. With the right agent to help your search, you could find your dream home at a greatly reduced overall price. Allow me to aid you in your search, whether you are casually looking or ready to move next week. Call me at (979) 255-1839.
Clay Lee – Realtor
Century 21 Beal, Inc.
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