FNC Inc.

October 21, 2010 11:30 ET

FNC Study Finds Home Prices Would Be 10% Lower Today Without Stimulus

Tax Credit for New Home Owners Cost Taxpayers $23 Billion but Boosted Prices and Stability

OXFORD, MS--(Marketwire - October 21, 2010) -  It's the most hotly debated question in the midterm elections: did the stimulus work?

Economists at FNC Inc., trail-blazing creator of mortgage and appraisal software, investigated the impact of one element of the stimulus, the First Time Home Buyer's Tax Credit. They used a unique research tool, FNC's new Residential Price Index (RPI). The RPI combines public records with private filings banking clients have shared with FNC. The RPI contains 78 million more records than any other nationally recognized residential index.

FNC economists concluded: The cost of the tax credit to taxpayers was $23 billion but FNC's research shows that the credit has brought stability to home prices in most states. Current home prices nationwide would be 10% lower and falling if Congress had not approved the tax credit.

"Between July 2008 and June 2010, the First Time Home Buyer's program induced an estimated 10.1% abnormal, or above-trend, growth in home prices," said Robert Dorsey, Chief Data & Analytics Officer. "There were basically three versions of this tax credit. The second was in play from February to October 2009. It provided potential homebuyers with much greater incentives to buy homes by waiving the repayment requirement and increasing the maximum tax credit from $7,500 to $8,000 in the meantime."

"The result of this tax credit stimulus was modest home price stabilization which lasted through June 2010," Dorsey explained. "In other words, if Congress had not approved the First Time Home Buyer's Tax Credit, home prices would be 10% lower than they are now and falling rather than stable and slowly rising."

FNC posted its RPI online as a free resource. If you are a political candidate or journalist, we offer this as objective, reliable fuel for informed and lively debate. Enjoy using it and read senior economist Yanling Mayer's article detailing FNC's methodology by following this link:

About FNC Inc.
Since 1999, FNC has pioneered real estate information technology, automated appraisal ordering, tracking, documentation and review for lender and servicer compliance with government regulations. FNC's platforms are in production at seven of the 10 largest U.S. mortgage lenders and provide value to large and small lenders with reduced costs and more efficient loan processing. With collateral management platforms, data and analytics, FNC provides advanced insight into the property backing a loan from origination to capital markets. Visit FNC online at

Contact Information

  • To arrange an interview with Dr. Robert Dorsey or FNC experts, contact:
    Bill Dabney
    FNC Public Relations Manager
    Phone 662/236.8304
    Email Contact