The amount of homes selling in the United States have decreased and even though some people see that as a big problem, it’s really the result of the government stepping in to sell the excess of houses that have been coming on the market since the crash that began in early 2007.
As housing prices lost value, more homeowners were defaulting on their loans. Sometimes because their income, or social situation had changed and others because they didn’t want to pay on a loan where they owed more than they had in the equity of their house. As the number of people who stopped making payments increased, the more prices continued to drop and that caused a great number of houses to default.
By the end of 2008, streets were covered with real estate signs, which continued until the $8,000 tax credit began in January of 2009. The change urged people to purchase a house at a low price and also receive money from the government for doing so if they qualified under the program guidelines. It was a wining situation for any buyer with enough cash to come up with the down payment, closing costs, and the desire to start looking for a new home.
When the tax credit ended, many buyers who were once so eager to purchase a house quickly dwindled away, leaving only a fraction of people left who were still interested in finding a home. Nonetheless, it was a good thing because there were not very many homes either because they had been bought up by everyone in the purchasing frenzy that had just occurred with the tax credit.
Now we are in a market where there are no longer multitudes of homes for sale. Coincidentally enough, there are also not a lot of buyers as well. This really leveled out the market and even though less houses are being sold altogether, we are still better off because the tax credit happened.