Another big opportunity for first-time homebuyers is on its way
WILLMAR -- Area real estate agents say a bill that would extend and expand the first-time homebuyer federal tax credit would definitely help the housing market.
As part of the government's efforts to encourage people to spend money to help revive the economy, the House voted 403-12 Thursday to expand a popular tax credit for homebuyers. The bill, which also extends unemployment benefits and expands a tax break for money-losing businesses, now goes to President Obama, who plans to sign it today.
First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package. But with that housing program scheduled to expire at the end of November, the House voted to extend it into the spring -- and to expand it to many people who already own homes.
When the original package was enacted, lawmakers learned that first-time buyers were buying many empty and foreclosed houses, said Paul Ryan, broker associate at RE/MAX in Spicer.
"This is going to help with the move-up situation that I think they anticipated would happen but didn't,'' said Ryan. "It's going to allow people that have been in their house for a while that have thought about moving but just haven't done it because of the market prices are now going to be able to sell their houses, obtain that credit and be able to get into a little bit bigger house or even for that matter a smaller house, I think.''
Ryan said the housing market is picking up because of the first-time homebuyers credit.
"We had a good year because of that. But I think this is going to spark even more interest in selling property as this point in time,'' said Ryan.
Dick Arne, a Realtor with Edina Realty, there is no doubt the expanded bill will help.
"It will give people an opportunity to actually take a little bit more time in finding a house that's going to fit their needs and at the same time give them a tax credit and an incentive to buy,'' said Arne.
"Obviously the Realtors and even those people who have their property for sale by owner (are) going to benefit, too. Owners trying to sell themselves want to get rid of their house. Not everyone lists, unfortunately. We'd rather have it the other way,'' he said.
"But it's a consumer driven bill that hopefully will pass and without too many strings attached,'' said Arne. "I'd like to see the buyer be required to live in the house for at least five years. That makes for stability.''
Buyers who have owned their current homes at least five years would be eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers -- or people who haven't owned homes in the previous three years -- could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
-- The Associated Press contributed to this report