The first-time homebuyers tax credit reversed the decline of housing prices in 2008 and early 2009. However, the reversal was accomplished primarily by pulling purchases forward. The data show that sales plunged after the expiration of the credit. This was first visible in the sharp drop in the mortgage applications index in the first weeks in May. This index has stayed very low and shows no sign of increasing with data through the middle of October. This indicates that the buying end of the market will be very weak through at least the rest of 2010, continuing the downward pressure on prices.

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