Families Considering Buying Their First House Have Limited Time to Save Thousands of Dollars on New Home Purchase This Year
Washington, D.C. – July 2, 2009 – (RealEstateRama) — Congressman Gary Peters, the Michigan Association of Realtors and a local family who recently closed on their first home today gathered at the family’s new house to discuss the tax credit available—for a few more months—that can save first time homebuyers thousands of dollars on the purchase of a new home. The American Recovery and Reinvestment Act, the economic recovery plan Congress enacted in February, created a temporary tax credit worth up to $8,000 for first-time homebuyers to help families become homeowners in tough economic times and to spur home sales in a sluggish housing market. Southeast Michigan foreclosure rates are among the highest in the nation (according to RealtyTrac, Oakland County’s foreclosure rate is in the top 5 percent among all counties nationwide), so encouraging the purchase of empty homes is extremely important for the region.
Realtors say that many potential homebuyers are unaware of the credit’s availability, or that the deadline for utilizing the tax break is approaching. Despite that, figures released today show pending home sales up for their fourth straight month, the National Association of Home Builders estimates that the tax credit has already resulted in a 160,000 unit increase in home sales this year, and the National Association of Realtors reports that traffic at open houses is up and there are more inquiries about buying homes today than compared to last year.
“The first-time homebuyer tax credit was an important piece of the economic recovery plan Congress enacted in February. Economists say that stimulating demand for new home sales among first-time homebuyers is essential to absorbing excess units on the housing market and is a necessary step in reversing falling home values,” said Congressman Peters. “This credit provides substantial savings for first-time homebuyers, and we want to ensure that families considering buying a home this year know these savings are available.”
“We have seen signs that the first-time homebuyer credit is working to stimulate demand in the housing market, but many families are still unaware that the credit is available,” said Bob Taylor, President-elect of the Michigan Association of REALTORS. “The credit expires five months from today, so families who think they may want to buy this year should start looking now if they haven’t already. This tax credit not only saves families thousands of dollars but also helps get vacant homes that are putting downward pressure on housing values off the market.”
“The first-time homebuyer tax credit in the economic recovery plan was definitely very helpful,” said Kelly Katz. “When you’re shopping for a house in tough economic times, it’s difficult to decide to make the big commitment and close the deal. But when you know you’ll basically get $8,000 off the top if you act this year, it provides a real incentive to pull the trigger.”
The Refundable First-time Home Buyer Credit provides first-time homebuyers a credit worth 10 percent of the purchase price of a home with a maximum credit of up to $8,000 (e.g., a $50,000 home yields a $5,000 tax credit; homes purchased for $80,000 or more yield the maximum $8,000 credit). The credit is available for homes purchased from Jan. 1, 2009 through December 1, 2009. The tax credit begins phasing out for individuals earning more than $75,000 annually or couples earning more than $150,000. Anyone who has not owned a home for the last three years qualifies as a “first-time homebuyer.”
CONTACT: Cullen Schwarz
(202) 225-5802
