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Is a Stronger Tax Credit Needed to Motivate Prospective Home Buyers?

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RISMEDIA, June 25, 2009-Despite affordable home prices and low interest rates, the majority of Americans considering a home purchase still need a little extra incentive. According to a recent survey conducted by Weichert, Realtors, increasing the current tax credit to $15,000 and/or extending it to all buyers would offer the motivation needed to turn more onlookers into buyers.

The study of more than 500 visitors to Weichert.com, found that of those who had not yet made the decision to buy, 84% would be highly-motivated to purchase a home if they could receive a tax credit of $15,000. In contrast, only 46% of respondents said they would be highly motivated to buy if they received an $8,000 tax credit.

“The current tax credit for first-time home buyers is generating some additional sales,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independently owned real estate companies. “However, this credit as currently constructed isn’t enough to jumpstart the market and stimulate the national economy.”

Currently, the number of first-time buyers purchasing homes in 2009 has increased thanks in large part to the $8,000 tax credit available. However, according to the results of the Weichert.com survey, increasing the tax credit to $15,000 would provide high motivation to buy for another 37% of those who don’t currently own a home.

Perhaps the greatest stimulus to the housing sector would be realized through the offering of a tax credit to existing homeowners as well. Four out of five current homeowners said they would be somewhat to highly motivated to buy if they received a tax credit of $8,000 for purchasing a home. If the tax credit was increased to $15,000, the number of existing homeowners motivated to buy would grow to 94%.

“Economists have long understood the importance of a healthy real estate market. Not only is it one of the largest sectors of our economy, but real estate transactions generate business in so many other areas. I don’t think it is any coincidence then that veteran lawmakers like Senators Isakson and Senator Dodd have introduced a bill in recent weeks to expand and increase the buyer’s tax credit as it becomes apparent more efforts are needed to help stabilize our nation’s economy,” added Weichert.

For more information, visit www.weichert.com.

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