The federal tax credit for first-time home buyers is now half way to its Dec. 1, 2009, expiration date, and it seems fair to ask just how much it is helping real estate markets. “First, buyers are generally aware of the fact that there is a tax credit available. However, a majority of them understand only a few, if any, of the program’s details.
The tax credit has a stimulative impact, but the effect is primarily psychological. Buyers want to get the benefit of the tax credit, and that encourages them to act, but the tax credit doesn’t have much impact on how much first-time buyers can afford to pay for a home.
The tax credit was a key part of the economic stimulus package approved by Congress and signed by President Obama in February. Designed to encourage home purchases, it can be worth as much as $8,000 in reduced taxes or added income.
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Rich Ferretti your Matthews homes and Mint Hill Homes specialist.