Home Buying Applications at a 13-year LowSubmitted by cthomas on Wed, 07/14/2010 - 09:02
No surprise there. With unemployment high and home values stagnant to falling, the only thing keeping the real estate markets--and especially the new housing market--afloat was the first-time homebuyer tax credit. There are several problems with that particular government policy, however. First of all, government spending and deficits are very top-of-mind in the public consciousness leading up to November, which probably doesn't bode well for continuing that program.
Second, you can only be a first-time homebuyer once. Those who have participated in the first-time homebuyer credit aren't going to do it again in a couple of years, even if that tax credit exists down the road. So, the demand we've seen for mid-to-low range homes in the first half of this year is probably going to disappear in the second half. And disappear for a while, given that this government program didn't create demand so much as shift it by encouraging those who might have bought in the next couple of years anyway to jump at the tax credit the first half of this year rather than delay it until they were a bit more comfortable financially.
If there's a silver lining in the economic news, though, it's that those who aren't going to buy new will hopefully take care of what they have. People who are planning to stay in their homes more than a couple of years will be more attentive to their roofing contractor's qualifications, methods, and materials. After all, if you're going to stay in your house for a while, you probably care a little bit more that the roof is put on properly. This could be a good sign for contractors focusing on quality methods and materials rather than price alone.