St Louis Home Loan Experts Are Calling the Home Buyer’s Tax Credit a Failure

This country has experienced major financial setbacks in the real estate housing industry and now faces some of the highest unemployment rates in decades.

So, with unemployment hovering at around 10 percent, St Louis mortgage experts had high hopes that the home buyer’s tax credit bailout plan that was instituted would stimulate housing demand in this already decimated market.

The biggest letdown to both political representatives as well as mortgage and real estate professionals is not only seeing this major federal stimulus package go down in smoke, but equally disturbing is the fact that this administration is equally failing at saving homes from inevitable foreclosure.

St Louis mortgage professionals also fear that a huge supply of discounted homes will hit the market in 2010 and this additional supply of homes will only worsen an already failing market situation.

What is worse is that there is no sign that this country will see any type of expansion in the housing market nor is there any immediate hope that there will be a huge demand for home purchases or refinance loans. And don’t expect to see any last minute extension for the tax credit stimulus program.

Tim Surrat, a practicing real estate agent, made the comment that, “No one is saying that they need to buy before the tax credit expires.” And that seems to be the most plausible outcry one could rightfully make right now.

Most professionals have agreed that the $6500 to $8000 tax credit has simply not been enough monetary incentive to push people in making a buying decision now.

Mortgage, banking and financial consultants have stated unequivocally that the savings on account of the home tax buyer’s credit will definitely not offset down payments or any other transactional costs.

Let’s take for example a house that is priced at $164,000. If the real estate agent’s commission is at 6 percent, the amount paid would be $9840. In this case, as it would for most transactions, the expenses would be much higher than the $6500 to $8000 being offered.

“You’ve got a really big problem that requires big guns, and the tax credit is just not big enough,” said Roberton Williams, senior fellow at the Tax Policy Center.

Now that this federal program is close to being extinct, many are now arguing that more time should have been spent on making this stimulus much more financially appealing to Americans and perhaps less time should have been spent on the recent health care package.

Let’s now turn our attention to the social security crisis that seems to be looming on the horizon. It too will need cash infusions to exist. Well, if this is fixed, one out of three wouldn’t be that bad.

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