The Housing Market After the End of the Homebuyers’ Tax Credit
Barry Ritholtz points to this chart of the Mortgage Bankers’ Association purchase index. It shows mortgage applications crashing after the expiry of the Obama administration’s homebuyers’ tax credit, falling to the same level as in May 1997, when there were approximately 40 million fewer people living in the United States and the rate of homeownership was a few percentage points lower. Hopefully, this is the bottom and after a few months the market will normalize from its new low. Delinquencies on mortgages backed by the Federal Housing Administration, an important metric, are down, for instance.