In February 2009 when President Barack Obama signed his $787 billion stimulus bill he also raised the first time home buyer tax credit to $8,000 and extended the program to purchases made by first-time buyers between January 1, 2009 and November 30, 2009, the new refundable tax credit has no repayment feature.
So how are things going?
In June, NAR Chief Economist Lawrence Yun said that prospective first-time buyers, prompted by rock-bottom mortgage rates and the $8,000 tax credit, were hitting the market with force. “Recent figures suggest about 45 percent of buyers have been first-timers, a higher proportion than the typical 35 to 40 percent during more normal years,” he said.
Home prices have plunged more than 32 percent on average from their 2006 peaks, yet the pace of the annual declines slowed in May for the fourth straight month, according to Standard & Poor’s/Case-Shiller home price indexes.
“This could be an indication that home price declines are finally stabilizing” after tumbling to 2003 levels, David M. Blitzer, chairman of the index committee at S&P, said in a statement.
Janet Yellen, the president of the Federal Reserve Bank of San Francisco, told a meeting of Oregon and Idaho bankers on Tuesday that “we glimpse the first solid signs that economic growth may be poised to resume. Indeed, I expect that to happen sometime this year.”
So is it time to buy for First Timers?
Well first of all the law defines a “first-time-home- buyer” as someone who has not owned a home within the previous three tax years. For married couples, the home ownership history of both individuals must meet this qualification. The tax credit is only available for homes purchased between Jan. 1, 2009, and Dec. 1, 2009. The tax credit applies for up to 10 percent of the home’s purchase price, with a maximum of $8,000.
With summer unraveling, first-time buyers seem eager to capitalize on the $8,000 tax credit, and why not. As a first time home buyer you get $8,000.000 tax credit just for buying a home. That has never happened in the history of our country that I know of. You can buy a home for 40% of what it cost to build it. That has never happened in the history of our country that I know of. You can borrow money to buy a home at historically low rates. Well that has happened before, but not often.
This should be like the California Gold rush of 1849, First time home buyers should be running into the streets making offers, buying homes, building communities and helping to stimulate the economy all across the nation. They are to some degree, but what’s holding them back?
Oh yes, I forgot, we are a nation of procrastinators and we still have a few months left. Let’s all just wait till the last minute. Then we can complain because of all the waiting in line.
Richard Bonn is the owner of First Time Home Buyer Guide. For more information on Richard please visit http://www.First-Time-Home-Buyer-Guide.info
[tags]First time home buyer, first time home buyer tax credit,[/tags]
|
|