The new home buyer tax credit program was intended to help people get into new homes, especially first time home buyers. The program offered a ten percent tax credit on the purchase price of a new home, up to a maximum of $8,000 on an $80,000 home. The new home buyer tax credit is set to expire at the end of November. Today, many people are wondering exactly what effect, if any, the new home buyer tax credit seems to have had on new home sales.

It’s important to understand a little bit about the program, first. The tax credit program applies only to first-time home buyers, which the government defines as buyers that have not owned a home for three years prior to purchasing a new home. The credit also has income limitations. An individual who makes less than $75,000 or a married couple who makes less than $150,000 qualify for the full credit, while those that make more may qualify for a partial credit.

The initial results seem to be promising. In September, sales of previously owned homes in the U.S. hit the highest level they’ve seen in two years. This suggests that the tax program has, at least in part, been a success. It also suggests that perhaps the housing market, as well as the overall economy, are on the mend.

According to the National Association of Realtors, home sales rose a total of 9.4 percent in September. This was an annual rate of 5.57 million units. In comparison, August saw an annual rate of 5.09 million units. Even the best projections for September suggested a rate of 5.35 million units for September. In addition, the total inventory of homes declined, which is another good sign. 472,000 homes were sold in September, but only 178,000 new homes were added to the market. These are some of the best numbers that the real estate industry has seen in quite a long time.

September wasn’t the only up month, however. Home sales have actually been rising for the past seven months, which reflects an improving trend in the overall housing market. Again, much of the trend is likely due to the new home buyer tax credit, but economists hope that it is also a sign of good things to come.

There is talk in congress of trying to extend the new home buyer tax credit program. Proponents argue that allowing the program to expire would have a dragging effect on home sales, and they may be correct. Other signs of a robust economy, such as improved employment numbers, are needed for consumer confidence to continue to grow, and for home sales to continue to rise on their own. Whether or not those numbers continue to improve or not remains to be seen.