"You've Caught the NET!"

Did the Fed Homebuyer's Credit, for First Time Buyers and Select Repeat Buyers, which expired the end of April, bolster the Real Estate Market?   Has its expiration thrown the market, in Chicago and elsewhere, into the doldrums?

One measuring stick, the number of Residential Loan Applications, fell 27% for the week ending May 14th, according to the Mortgage Bankers Association, as reported by Mary Ellen Podmolik of The Chicago Tribune.  In May alone, mortgage apps have declined 20% so far - to their lowest level in 13 years.

Another came from the U.S. Commerce Department early last week.  Although they reported housing starts jumped in April, building permits, which measure future new housing activity, fell 11.5% month to month, to their lowest level since October, 2009.

For our Team, which does considerable business in North and Northwest Side Chicago Neighborhoods and close-in Chicago Suburbs, interest in the up-to-$8,000 Fed Tax Credit seemed muted, as compared to a bit of a spike of interest in November, 2009.  At that time, there was uncertainty whether the credit program would be extended into this year.  Many prospective first-time homebuyers hustled to take advantage of the free Fed money.

Figures from the Illinois Association of Realtors show existing home resales this past March were roughly 45% higher than they were one year earlier.  April figures are due out this week, but they will not yet reflect any falloff resulting from the expiration of the Fed credits.

Conventional wisdom suggests any sluggishness from the expiration of the credit could be countered by even more aggressively pricing housing inventory still available.  It appears, at least early on, however, that, for many prospective buyers, taking the Fed Homebuyer Incentive off the table provides one more reason to to return to the sidelines - at least for the time being.

Please see our post today via BlogChicagoHomes.com.

DEAN MOSS & DEAN'S TEAM CHICAGO