Now information about First time buyer tax credit. There has been concern in some quarters that the tax credit could allow 100% financing causing higher default of FHA loans. There is an income limitation: The credit is available to taxpayers with adjusted gross incomes up to $75,000 or $150,000 for married taxpayers filing jointly.
Currently the stock market may not be your best choice-think money market or CD. Assuming the Buyer sells after 5 years (a not unrealistic time frame), and having made three years of repayment of the credit, the Buyer will have $6,000 less equity upon sale. The current national housing market is depressed. On a positive note, the National Association of Realtors® asked Congress to do away with the repayment provision of the tax credit to all buyers, not just first time buyers.
The National Association of Realtors (NAR) estimates that 4.4 million home buyers will receive the tax credit. Brokerages are riding on a three month rise in pending home sales, which they directly attribute to the first time homebuyers' tax credit. Many realtors are expecting a deceleration in home sales over the summer months due to the 'hangover effect' created by the tax credit, whereby buyers scrambled to sign contracts for homes to obtain the tax credit, effectively borrowing buyers from later months. Optimists feel that affordable mortgages are still feasible and, coupled with low home prices, a slow and protracted rebound in the housing market may occur. Mortgage and title companies have been slammed with too much work created by the tax credit, delaying many deals. While the government may have had the right idea in trying to spur home sales with the tax credit, it may not have been enough to aid the housing market beyond the life of the tax credit.
Currently the stock market may not be your best choice-think money market or CD. Assuming the Buyer sells after 5 years (a not unrealistic time frame), and having made three years of repayment of the credit, the Buyer will have $6,000 less equity upon sale. The current national housing market is depressed. On a positive note, the National Association of Realtors® asked Congress to do away with the repayment provision of the tax credit to all buyers, not just first time buyers.
The National Association of Realtors (NAR) estimates that 4.4 million home buyers will receive the tax credit. Brokerages are riding on a three month rise in pending home sales, which they directly attribute to the first time homebuyers' tax credit. Many realtors are expecting a deceleration in home sales over the summer months due to the 'hangover effect' created by the tax credit, whereby buyers scrambled to sign contracts for homes to obtain the tax credit, effectively borrowing buyers from later months. Optimists feel that affordable mortgages are still feasible and, coupled with low home prices, a slow and protracted rebound in the housing market may occur. Mortgage and title companies have been slammed with too much work created by the tax credit, delaying many deals. While the government may have had the right idea in trying to spur home sales with the tax credit, it may not have been enough to aid the housing market beyond the life of the tax credit.