In one of the most predictable events in history, home sales in the U.S. have dropped dramatically since the expiration of the home buyer tax credit.
Sales of previously occupied homes fell to the lowest level in 15 years last month as the economy weakened.
The National Association of Realtors says July’s sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million. It was the largest monthly drop on records dating back to 1968.
Home sales picked up in the spring when the government was offering tax credits. But the market has struggled since the tax credits expired on April 30.
The credit was a nice temporary giveaway to the realtor and home builder lobbies, but terrible for the economy. Now that the credit has expired, home sales will once again continue their downward decent. Those that bought a home and redeemed the credit will quickly see the value of their credit evaporate as the value of the home they recently purchased will plunge.
And because these home buyer tax credits weren’t “paid for” by reductions in federal government spending. taxpayers are footing the bill for a massive boondoggle to major special interests, and whose benefit to the home buyers themselves will vanish in mere months as housing values drop.
It will also be interesting to track over the next several years how many of the people who purchased a home courtesy of the credit will end up in foreclosure.
As usual, government intervention into the marketplace will leave economic destruction and chaos in its wake.