Housing Market Declines After Federal Tax Credit Program Ends

Online, August 3, 2010 (Newswire.com) - With mortgage rates at all time lows, recent demand for mortgages increased significantly. While this appears to be good news, financial advisor Dennis Tubbergen asks us to take a further look at the total numbers for June's housing market.

Tubbergen, who is CEO of USA Wealth Management LLC, a federally registered investment advisory company, notes that demand for mortgages to buy new homes fell.

Tubbergen points to a Reuters article on July 7, 2010 which gives some concerning statistics: Refinancing drove total U.S. mortgage applications to a nine-month high last week, while demand for loans to purchase homes sunk to a near 13-year low as buyers remained sidelined after the expiration of federal tax credits.

In his economic blog, www.dennistubbergen.com, Tubbergen has stated that he felt the housing market might suffer when the federal tax credit program came to an end.

In May of this year Tubbergen was quoted as saying, "In my view, the home sales numbers reflect a tax policy which has some potential home buyers buying homes now rather than at some point in the future. This policy could cause future home sales to fall from where they would have otherwise been."

"Homes that sold in April (the last month that tax credits were available) were homes that would have likely been sold at a later date anyway," he notes. "It should come as no surprise the demand for mortgages has continually declined since the expiration of the tax program."