According to the National Association of Realtors, if all home buyers become eligible for a tax credit without a repayment feature, it could result in an additional 555,000 home sales, which would be enough to significantly reduce excess housing inventory.
Lawrence Yun, NAR chief economist, said NAR is advocating a tax credit for any home purchase meeting qualifying underwriting standards. “A home buyer incentive is critical to help reduce housing inventory and stabilize home prices,” he said. “The bigger the incentive, the faster housing can help pull the economy out of recession. The cost to the Treasury would be far less than the additional costs of a prolonged recession with insufficient housing stimulus.”
Projections from the NAR show several different options for the home buyer tax credit.
A full credit to ALL buyers would mean an additional 2.22 million households would meet the income requirements for purchasing a home, but only one in four would make a purchase.
If only first-time home buyers are eligible and the repayment feature is dropped, it could spell an additional 202,000 home sales.
If extended to all purchases and the repayment feature is kept, there could be 181,000 more home sales.
What would a home buyer tax credit mean for you and what kind of requirements would you need to take advantage of it?
Jan. 14, 2009.