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Home Sales Up by 75% despite Increased Credit Score Requirements

By Sally Maison
Published: Tuesday, December 22nd, 2009

Home sales in the Great Fort Hood Area unexpectedly skyrocketed by 75 percent this November despite increased credit score requirement by federal creditors. Analysts say this increase was caused by residents trying to catch up with the tax cut for first time homebuyers or home owners.

Home Sales Up by 75% despite Increased Credit Score RequirementsThis year, President Barack Obama, approved an $8,000 tax cut for first time homebuyers to aid an ailing housing market. It would have expired on November 30, but Congress voted to extend its deadline into 2010.

Harker Heights, Copperas Cove, Killeen, Nolanville, and the rest of the Great Fort Hood Area saw their lowest home sales in November last year when only 147 new homes were sold. Last year, Great Fort Hood Area averaged at 238 home sales each month. However, things turned around this month as November 2009 sales saw a 75 percent increase from the same month last year. Two hundred fifty-eight new homes were filled in the area this November. Analysts note that many first time homebuyers are undaunted by the 650 credit score require as they have managed to increase or at least keep their ratings intact before filing for an application with mortgage securers Fannie Mae and Freddie Mac.

Jose Segarra, who speaks for the Fort Hood Area Association of Realtors, says it took a long time for Congress to extend the tax cut. Many homebuyers have already decided to take advantage of the credit so they immediately sought a contract.

Not only was November’s sales spurred by this tax cut. October’s sales were also up, 28 homes more than expected. However, some industry analysts say investors must not be overconfident with these soaring sales. They cited a breakdown in house sale in November 2008 as another major contributor to this house buying surge.

Segarra adds that 2009 home sales only averaged between 200 and 250, which is not too far from last year’s average. However, numbers were so low in November last year that November 2009’s average seemed so high. Segarra is confident that the home sales will remain good for the next two months. He says sales this December and in January 2010 will also increase because of the homebuyers rushing for the $8,000 federal tax cut.

Segarra further says first time homebuyers are likely to spend more time improving their credit rating or credit scores by next year, aside from seeking approval from federal creditors. He notes that homebuyers naturally want low-interest mortgages, and the only way they can get one is by improving their credit rating.

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