POPLAR BLUFF, MO (KFVS) - New home sales dropped by 33 percent in May, and realtors say the dip is due to the expiration of the $8,000 tax credit for new home buyers.
Nathan Maurer with Poplar Bluff Realty says his fellow agents weren't happy to hear the tax credit for new home buyers won't be renewed.
He says it's been a big boost for sales.
"It's been a benefit," he said. "Anytime you can offer an incentive to buy and offer them cash money back and so forth, it's most definitely an incentive."
Paul Arnold with Coldwell Banker has been selling real estate for more than 20 years.
He says May and June have both been good months for his business, but doesn't know if that will continue without the tax credit.
"It calmed people down, and now people are maybe a little more rational about what they're doing and what they can do," Arnold said.
Arnold says the tax credit has helped the housing market rebound to better levels than the past couple of years.
"The past two years have been bad," he said. "This has been a good year. My agents are all busy, we're closing a lot of sales, and prices have come down."
He says prices have dropped as much as 10 to 15 percent in Poplar Bluff, which has helped keep the market steady.
Maurer says low unemployment rates in town have also helped prevent a free fall in new home sales.
"The industrial park and our hospitals have been expanding," Maurer said. "The job market in general has not changed. We have not lost any big industrial places."
Without the tax credit to help boost home sales, Arnold says he thinks sales will return to a normal level.
"I think that maybe we're getting into a time where responsible people will be buying homes and they'll be making payments and buying what they can afford and not what they totally just want," he said.
All home sales that qualify for the tax credit must be closed by June 30.