The federal government's effort to boost home sales through tax credits have benefited 3.3 million homebuyers since 2008, a government watchdog said Thursday.
The government enacted three versions of the tax credits aimed primarily at first-time homebuyers. The credits varied in size and scope, but the nonpartisan Government Accountability Office (GAO) reported that they benefited a total of 3.3 million claimants and will cost the government roughly $22 billion through 2019.
The tax credits have now expired, and the Obama administration said this week that it is not planning to push hard for another version of the credit.
The most popular of the three credits was included in the Obama administration's 2009 fiscal stimulus package. The credit, with a maximum value of $8,000, was claimed by 1.7 million homebuyers, representing roughly $12 billion of stimulus money.
The tax credits were approved by Congress to prop up the housing market, which began declining in the summer of 2006 and then helped trigger the financial crisis and recession. Home prices have plunged roughly 30 percent since the summer of 2006, according to the S&P/Case-Shiller home price index, although they have shown signs of stability during the last half-year.
But the housing market remains weak, and recent reports have shown steep declines in the sale of new and existing homes. Some private economists have raised concerns that the tax credits have simply encouraged homebuyers to purchase homes earlier rather than increase the total number of homes purchased.
The National Association of Realtors reported last week that the expiration of the tax credits was a major factor in the 27 percent decline in the sale of existing homes in July.
"Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired," said Lawrence Yun, chief economist at the association.