Tax credit no benefit for homebuyers

When the government introduced the $8,000 first-time homebuyer tax credit program in 2009 it was supposed to help inject more cash flow into the market, while helping people purchase a home, according to FOXBusiness.

What it may have ended up doing was hurting some of the people that took advantage of the plan, according to the news source. Moving may not have been on the forefront of people's minds at the time, but the tax credit incentive could have encouraged them to relocate.

Home values fell an average of $15,000 from last year, according to Zillow.com. With the continued decrease in home values, people who saved $8,000 in taxes with the credit lost $15,000 in value, according to The Wall Street Journal. This $7,000 loss shows that the plan may not have been what the market needed to recover. Zillow is predicting that home prices will not bottom out until 2012, further adding to homeowners' losses.

This program unnecessarily caused home prices to inflate by injecting a surging number of buyers into the market, according to FOX. Once the credit ended, sales numbers dropped and prices followed right along.  

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