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Brett Neely: And the first-time homebuyers tax credit expires on Friday. Nearly 2 million people took advantage of the program. Did it really help revive the housing market? Brett Neely takes a look.
Brett Neely: Consumers think so. A new survey by Prudential Real Estate says the vast majority believe the tax credit has helped turn around the U.S. housing market. Jim Mallozzi is the company’s CEO:
Jim Mallozzi: We’re thankful the government did it. It helped bridge a difficult period for American consumers.
Columbia University economist Chris Mayer says it was more of a giveaway. He says most homebuyers probably would have bought anyway — the credit just gave them a reason to buy sooner rather than later.
Chris Mayer: You know, given that this cost us $12 billion, I think that’s a pretty big cost for a program that had at best pretty moderate or small effects.
Mayer says don’t thank the tax credit for stabilizing the housing market.
Mayer: The single biggest thing that affected the housing market was the Fed’s policy to bring down mortgage rates.
But those rates are rising, which Mayer says could pour cold water on the market later this year.
I’m Brett Neely for Marketplace.
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