Did the Homebuyer Tax Credit Work?

By Megan McArdle

It depends on how you define "work".  Apparently only 6% of first-time homebuyers cited the tax credit as the driver behind their purchasing decision.  I suppose that's plausible, given low, low interest rates--which are a far greater contributor to affordability.  But I'd be surprised if a majority didn't factor the tax credit into the price they paid . . . which itself could have helped the market clear in a lot of places.  If your goal was to inject purchasing power into the economy, and help unlock the housing market, I suppose it worked, at least somewhat.  If your goal was to help people afford houses, less so.

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