The importance of the first-time homebuyer tax credit was further illustrated by a poll released by real estate information company Zillow.
The company revealed that 18 percent of prospective first-time home buyers said extending the $8,000 credit through 2010 would be the “primary influence on their decision to buy.”
Another 25 percent of respondents said a possible extension would have a “significant influence” on their home buying decision, 27 said it would have “some influence,” and 31 percent said it would have no influence.
Zillow did the math and thinks an extension from December 30, 2009 to November 30, 2010 would result in an additional 334,000 home buyers.
But Zillow economists cautioned that the homebuyer tax credit may not be the most efficient means of boosting flagging home sales.
“There’s little doubt that the tax credit will boost demand at the margin, and that fact will make it easier to work down our current high inventory levels of existing homes on the market,” said Zillow Chief Economist Stan Humphries, in a release.
“That said, the cost of bringing these additional homebuyers into the market is substantial. Assuming 1.86 million first-time buyers take advantage of the full credit once extended, this translates into an additional $14.86 billion in government spending.”
“For every five homebuyers who receive the credit, four would have bought their home even without the credit.”