As the end date for the 2009 US tax credit nears, the nation waits to hear the outcome of the government's decision whether to extend the credit an additional six months, or maintain the original completion date.
The credit was designed to further boost the real estate market through the worst of the financial crisis, offering incentives for the majority of buyers wishing to enter the market.
While the credit has been available to all homebuyers with a gross income of up to $75,000, the final date for accessing the credit is November 30.
As sales contracts can take up to 60 days to complete, time is running out for buyers wishing to take advantage of the credit.
Tax credits for real estate purchases are not a new addition to the US property market, yet the 2009 credit opportunity featured various distinct advantages in comparison to previous credits.
Buyers who had obtained the 2008 credit were able to receive up to a maximum of $7,500 and were required to repay the credit over a 15 year period.
Announced in February, the 2009 tax credit for purchasing real estate offers up to 10% of the price of the home, or up to $8,000 for first-time home buyers.
The classification of a first-time buyer has been generous in admitting any buyer who did not own their main place of residence during the three years prior to receiving the new tax credit.
Another distinct advantage was that the 2009 credit is not required to be repaid on the condition that the property remains the main residence of the owner for a minimum of 36 months.
Since the introduction of the credit the US real estate sector certainly has started to revive, with prices beginning to stabilise across the market and slowly increasing in some regions.
Buyers able to enter the property market in its present situation receive several advantageous benefits.
Along with the tax credit, mortgage interest rates have been low for those able to access the market and property prices have been at their lowest in years.
While it is considered that the tax credit has assisted in stimulating the real estate market out of the worst of its slump, availability of the credit has only been accessible by a limited sector of the public.
Job insecurity and bad credit ratings have kept a large sector of potential buyers out of the market.
As an incentive to those who have been able to enter the property market, the tax credit has been used by a large percentage of those who have received the benefit to furnish their new homes.
Conflicting opinions abound over the possible extension of the tax credit.
Initially offered as part of the government's stimulus plan for the US economy, the potential costs associated with a six month extension of the credit are expected to reach around $15 billion, further straining the budget deficit of the US economy.
Understandably, the financial aspect is the main concern over the approval of an extension of the credit following the November 30 deadline.
Over 1.
2 million homes have been purchased using the tax credit since its introduction in February, evidently achieving the aim of stimulating the market.
Property prices have been on the increase since April, with the number of re-sale property purchases in July being at the highest levels for the past two years.
As the recent market growth is being attributed to the tax credit, any decision against extending the credit is expected to affect the real estate market back into a downturn.
Loan applications are expected to reduce, leading to fewer purchases and a possible drop in property prices once again.
Although various economists argue that the financial requirements of extending the tax credit could be better applied to other sectors of the failing economy, the impact of the credit is currently being evaluated prior to a final decision being released.