Source: FNC press release
OXFORD — Economists from a real estate technology company have found that although the cost of the tax credit to taxpayers was $23 billion, the federal first-time home buyer’s tax credit has brought stability to home prices in most states. Current home prices nationwide would be 10% lower and falling if Congress had not approved the tax credit.
Economists at FNC Inc., creator of mortgage and appraisal software, investigated the impact of one element of the stimulus, the First Time Home Buyer’s Tax Credit. They used a unique research tool, FNC’s new Residential Price IndexTM (RPI). The RPI combines public records with private filings banking clients have shared with FNC. The RPI contains 78 million more records than any other nationally recognized residential index.
“Between July 2008 and June 2010, the First Time Home Buyer’s program induced an estimated 10.1% abnormal, or above-trend, growth in home prices,” said Robert Dorsey, Chief Data & Analytics Officer.
“There were basically three versions of this tax credit. The second was in play from February to October 2009. It provided potential homebuyers with much greater incentives to buy homes by waiving the repayment requirement and increasing the maximum tax credit from $7,500 to $8,000 in the meantime.”
“The result of this tax credit stimulus was modest home price stabilization which lasted through June 2010,” Dorsey explained. “In other words, if Congress had not approved the First Time Home Buyer’s Tax Credit, home prices would be 10% lower than they are now and falling rather than stable and slowly rising.”
FNC is a real estate information technology company. With collateral management platforms, data and analytics, FNC provides advanced insight into the property backing a loan from origination to capital markets.