New first time home buyer tax credit may help an ailing housing market

New first time home buyer tax credit may help an ailing housing market

On February 17th President Obama signed into law the “American Recovery and Reinvestment Act of 2009.” One of the measures in the bill is the new Homebuyer Tax Credit which will be available to first time home buyers closing on home (primary residences only) between Jan 1st and Dec 31st of 2009. This credit is different from the 2008 version in that it is non-repayable. This is a huge advantage to the home buyers since they will take the new $8000 credit on their 2009 tax return and will never have to repay it. If the credit is over and above what their tax liability is for the year, a refund check will be issued for the difference. Again this credit is only for first time buyers and only for use when buying a primary residence.

Although this measure should help sellers find more buyers in this crazy market, some experts feel that it does not go far enough. First of all, the credit is only available to first time buyers and not to anyone looking to move and buy a home. Secondly, investors, who may be more inclined to buy up some of the large pools of foreclosures and distressed homes, are left out of the mix also.

What we do hope is that this bill, combined with the low mortgage rates and slew of housing inventory will prompt some buyers, who have been sitting on the sidelines recently, and get them back into the game. At no point in recent history has the opportunity been so ripe for first time home buyers. I hope that they start taking advantage of these opportunities and their activity will be a small step in the right direction for this slumping housing market.

Thanks,
Chuck Conto
REIS and www.cashforpittsburghhomes.com