The first-time home buyer tax credit has aided the improvement in residential construction and, in essence, accomplished what it was expected to do. But the July housing starts and building permits may be the last of the large positive effects this program yields.

With the Nov. 30 deadline to qualify for the tax credit looming, it will now be extremely difficult, if not impossible, to sign a contract, secure financing, build a house and close before the program ends (see First-Time Home Buyer Tax Credit for more information on the credit) ?EUR??,,????'??+ and with its conclusion, one support to the recent improvement in housing demand will be gone.

Some of July?EUR??,,????'???s rise in single-family permits may indicate a slow revival in the housing market beyond the stimulus of the first-time home buyer tax credit. It may even be due to some of the expected ripple effect from the tax credit as some potential new home buyers were able to finally sell their existing homes to people who qualified for the tax credit.

This ripple in the housing market may help explain the increased optimism among home builders as reflected in the August NAHB/Wells Fargo Housing Market Index (HMI), which inched up a point to 18 from the month before.