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Too much credit goes to homebuyer tax credit

Mary Ellen Podmolik Chicago Tribune
Too much credit goes to homebuyer tax credit - homebuyer - property tax - United States

There's been much speculation surrounding the federal homebuyer tax credits enacted to jump-start home sales, about whether they worked and whether they, in effect, borrowed from future sales as consumers hurried purchases to nab the tax benefit.

Sure, sales have plummeted since June, the original date by which buyers had to close transactions, before lawmakers extended the deadline to Sept. 30. On a year-over-year basis, sales of existing homes in the Chicago area tumbled 25.1 percent in July and 19.6 percent in August. Anecdotally, real estate agents have said they saw buyer demand dry up, and the second half of the summer was very slow.

But a new study performed at the University of Illinois at Urbana-Champaign, based on new federal data, seems to throw a little water on the idea that the tax credit provided most of the fuel for the sales gains seen earlier this year.


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