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12 Comments on First Time Home Buyers Free $8,000 From The Government Extended and Expanded!
Hey First Time Buyers!
Brian is absolutely right! Just read yesterday's news blurb out of Texas A&M below and don't wait. You have to CLOSE on your purchase on or before 11/30/2009 to qualify.......... and Closings can be delayed. So contact Brian, find the house of your dreams; negotiate the your purchase; find a lender; complete a Title Search, home inspection & etceteras; get your HUD-1; and, then go to Closing.
The above can take 90-120 days with many agents. You nolonger have that amount of time. I have known Brian Nichols more than 25 years and can truthfully say that he is the best Buyer's Agent I have ever worked with. He can help you find, fund and close on a house before November 30th, but even Brian has limitations, so get started now!
You will very glad that you did........... now and many years from now. Get going!!!
TAX CREDIT EXPIRES SOON
HOUSTON (Houston Chronicle) - The window for first-time homebuyers to take advantage of the $8,000 federal tax credit will close at the end of November.
To qualify for the credit, any transaction involving a first-time buyer must close before midnight on Nov. 30, 2009.
Tax credit guidelines are discussed in the Houston Chronicle and in past issues of RECON.
Let's be very clear concerning all the details of this historic gift from the government for first time homebuyers. Let's talk first about who qualifies for this $8,000 gift from the government. First time homebuyers buying a new or existing home are eligable for this $8,000 gift from the government. To qualify for this gift a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of this tax credit the purchase date is the date when closing and funding occurs and the title to the property transfers to the new homeowner. A first time homebuyer is a buyer who has not owned a principal residence during the three year period prior to the purchase. For a married couple this three year homeownership history would apply to both spouses. This means that if one spouce has not owned a home in the past three years,but the other spouce has that neither spouce would qualify for the first time home buyer tax credit. However, unmarried joint purchasers may use this credit from the government to apply to any buyer who qualifies as a first time homebuyer. For example if a father jointly purchases a home with his daughter,or his son. It's very important to understand that ownership of a vacation home,rental property,or time-share all of which were not used as a principal residence would not disqualify any buyer as a first time home buyer.
Buyers need to realize that the housing market has hit bottom and is beginning to rebound. While no one expects tremendous appreciation year-over-year, the below news article by Austin Kilgore was a real wake-up call for me.
Couple that with rising fixed mortgage rates and the time to buy does not look like it will get any better than it is right now............ and that does not take into account the current first time homebuyer incentives.
Be smart and grab opportunity by the horns or wait and wish that you had acted sooner. Contact you local Realtor and get the process started. In North Central Texas & the D/FW Metrplex, that means Exit Realty Metro - Dallas and its Owner Brian Nichols (214-803-3900 is his private cell number).
Prices Rise 7% Nationwide, Says Clear Capital
By AUSTIN KILGORE
September 2, 2009 11:01 PM CST
National home prices increased 7.3% and the saturation of real estate owned (REO) properties also declined three percentage points to 30.1% over the past four months compared to the previous three.
The so-called "rolling quarter" is the backbone of the Clear Capital Home Data Index Market Report. Clear Capital said its method eliminates the lag time between the end of a reporting period and the compilation of data.
"The price changes in this month's highest and lowest performing markets lists speak to the extremely positive summer home buying season-more than what can be attributed to seasonality," Clear Capital president Kevin Marshall said in a statement.
All four regions in Clear Capital's report experienced gains, led by a 16.4% increase in prices in the Midwest, a 5.7% increase in the South, 5.4% in the Northeast and 3% in the West.
Marshall said he anticipates more REO properties to hit the market later in the year, the momentum built during the summer could carry over into the winter months.
"Buyers are getting nervous that they are missing the bottom of the market, so they're choosing to get in the market now. These factors greatly increase the chances of a springtime recovery next year," he said.
More important data on the rules that go with this $8,000 gift from the government. The amount of this gift to the home owner is equal to 10 percent of the home's purchase price up to a maximum of $8,000 from the government. It must be noted that there are income limits for getting this gift money. The income limit for single taxpayer's is $75,000,and the limit for married couples is $150,000. The reason I call this a government gift is that when this program was first introduced it was a tax credit that had to be repaid. It was introduced in July of 2008 and carried the weight of an interest free loan from the government. Now the money is free from the government as long the home buyers use the residence as their principal residence for at least three years.
Particpating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Use the IRS Form 5450 to determine the tax credit amount. Claim this amount on line 67 of the 1040 form for 2009. There is no pre-approval needed, just do it. Any home that will be used for at least three year as your primary residence will do. Single faimly ,townhouses, condominums, and manufactured homes or houseboats. The don'ts include a home purchase from your ancestors(parents), your lineal descentants (children), or your spouse.
An important point with this free government money is that the tax credit is refundable. What this means is that this government credit can be claimed even if the taxpayer has little or no federal income tax liability. In other words the government will send a taxpayer a check for as much as the full $8,000 if their is no tax liability.An example of this is a taxpayer that owes $1,000 to the government for federal income taxes would receive from the government a check for $7,000. Never in the history of real estate has there been such a great deal from the government to home buyers.Remember that a tax credit is not the same as a tax deduction. A tax credit is a dollar for dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $3,000 in income taxes and who receives an $8,000 tax credit would receive a check from the government for $5,000.
So true! Is this an outstanding deal or what? It's like the "perfect storm" of real estate-- the lowest interest rates in years, the lowest home prices in years and an amazing tax credit too! Buyers who don't take advantage of this will kick themselves later on down the road. We don't want that to happen, so get realistic... there is no perfect house, but there is one that's just right for you.
A question often asked is if a person is qualified for the tax credit and they buy a home in 2009,can the tax credit be applied against their 2008 tax return? Yes because this law allows taxpayers to elect to treat home purchases made in 2009 as if the purchase occured on December 31,2008. An amended tax return would be required in order to receive money back from the government.What this all means is that HUD will permit buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than wait till they file their 2009 tax return. This process HUD refers to as " montization'.
Time is fast running out for first-time buyers hoping to get a tax credit of up to $8,000, and Realtors say they're seeing a marked upswing in interest as the deadline looms.
Real estate groups also are urging Congress to extend the credit beyond its current deadline and expand the tax credit to up to $15,000. Now, buyers must close on their purchase by Nov. 30 to be eligible for the credit.
Home builders and real estate organizations are concerned that letting the tax credit expire could knock the wind out of the current housing recovery. And failing to expand the credit could imperil efforts to get more move-up buyers into the market.
"Right now, the recovery is in the first stage and getting entry-level buyers in, but it's having no impact on the move-up buyer," says Richard Smith, CEO of Realogy, the parent company of Century 21, Coldwell Banker and others. "If we can expand the credit to go after that move-up buyer, we'll be home free."
The tax credit available to first-time home buyers is already linked with an uptick in sales. For the first time in five years, existing home sales have increased for four months in a row, according to an August report by the National Association of Realtors (NAR).
WASHINGTON (Reuters) – Sales of previously-owned U.S. homes jumped to a two-year high last month, according to data on Friday, though the looming expiry of a tax incentive for first-time home buyers was a major factor spurring sales.
The National Association of Realtors said sales of existing homes jumped 9.4 percent in September to an annual rate of 5.57 million units, the highest level since July 2007. Financial markets had expected sales to rise to a 5.35 million unit pace after a surprise decline in August.
Sales were partly driven by first-time buyers rushing to take advantage of the government's popular $8,000 tax credit, which is due to expire at the end of November. Sales were up 9.2 percent compared to September of last year.
"The rapid gain in home sales over the past few months likely owes, in part, to the home buyer tax credit. That said, the trend in home sales is still higher amid greater affordability and an improving economic outlook," said Michelle Meyer, an economist at Barclays Capital in New York.
Despite the bullish report, U.S. stocks fell as investors fretted over disappointing results from chipmaker Broadcom Corp and silicon producer MEMC Electronic Materials Inc, which bucked a recent trend of solid earnings reports.
The blue-chip Dow Jones industrial average ended down 1.08 percent at 9,972 points, slipping below the psychological 10,000-mark for the first time in two days.
However, home appliances maker Whirlpool Corp and manufacturing group Fortune Brands Inc reported third-quarter profits that were above market expectations. Fortune Brands also raised the low end of its full-year profit forecast, citing signs of stabilization in housing construction.
The housing sector's collapse and subsequent global credit crisis helped to push the U.S. economy into recession at the end of 2007. The downturn was the worst in 70 years.
The housing market is now crawling out of a three-year slump and analysts believe homebuilding probably contributed to economic growth in the third quarter, which would be its first positive contribution since the end of 2005.
ECONOMY GROWING AGAIN
Signs of recovery in the housing market coupled with other fairly upbeat data strongly suggest the economy started growing again last quarter for the first three-month period since the second quarter of 2008. The government will release data on third-quarter gross domestic product next week.
Sales for both new and previously-owned homes have been boosted by a combination of the tax credit, depressed prices and low mortgage rates.
But there are worries the expiration of the tax credit could hamper the recovery, and many lawmakers want to extend the program, with some pushing to expand it to all buyers.
The tax credit has so far cost the government about $10 billion and the Obama administration has yet to decide whether it will back an extension, weighing it against the impact it will have on an already bloated budget deficit.
"We are hopeful the tax credit will be extended and possibly expanded to more buyers ... because the rising sales momentum needs to continue for a few additional quarters until we reach a point of self-sustaining recovery," said Lawrence Yun, chief economist at the Realtors' trade group.
Distressed properties made up 29 percent of sales last month and first-time buyers accounted for 31 percent, but analysts said other forces also helped.
"Our view is that near-record affordability and falling inventory is pulling people into the market," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.
The inventory of existing homes for sale in September dropped 7.5 percent to 3.63 million units, the NAR said.
September's sales pace pushed the supply of previously owned homes on the market down to 7.8 months' worth, the lowest in 2-1/2 years, from 9.3 months in August.
On the prices front, the national median home price fell 8.5 percent to $174,900 in September from a year earlier, the smallest percentage decline in 13 months.
Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum
Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”
Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.
Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.
“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.
Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.
Northeast
Regionally, existing-home sales in the Northeast increased 4.4% to an annual level of 950,000 in September, and are 11.8% higher than September 2008. The median price in the Northeast was $234,700, down 7.0% from a year ago.
Midwest
Existing-home sales in the Midwest jumped 9.6% in September to a pace of 1.25 million and are 7.8% above a year ago. The median price in the Midwest was $147,600, which is 1.0% below September 2008.
South
In the South, existing-home sales rose 9.0% to an annual level of 2.06 million in September and are 10.8% higher than September 2008. The median price in the South was $153,500, down 7.6% from a year ago.
West
Existing-home sales in the West surged 13.0% to an annual rate of 1.30 million in September and are 5.7% above a year ago. The median price in the West was $219,000, which is 15.0% below September 2008.
For more information, visit www.realtor.org.
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Read more: http://rismedia.com/2009-10-25/big-rebound-in-existing-home-sales-shows-first-time-buyer-momentum/#ixzz0V3LfQ6JG
It is finally official. The homebuyers' tax credit has been extended to April 30, 2010.
President Barack Obama approved the extension as part of a $24 billion economic stimulus bill signed Friday. The bill also includes an extension of unemployment benefits to the longtime jobless and tax credits for some businesses.
The housing tax credit portion of the bill extends the $8,000 tax credit for home buyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to other homeowners who have lived in their current home for at least five years and are seeking to relocate.
Another modification to the original legislation raises the income limits for program participation from $75,000 for a single purchaser to $125,000 and from $125,000 to $225,000 for a couple. There are also credits available on a diminishing basis above those income limits.
The bill was passed by the Senate on Wednesday evening and by the House on Thursday. Both bodies acted in a bipartisan manner which has seldom been seen this year. The Senate passage was unanimous; the House voted 403 to 12 for the bill.
Housing interests as well as the Obama Administration had lobbied heavily for the extension. In a statement released after the House passage of the legislation, Mortgage Bankers Association Chairman Robert E. Story, Jr., said, "At a time when we are finally starting to see some signs of life in the housing and mortgage markets, extending and expanding the homebuyer tax credit is a critical step to keeping the momentum. This has been one of MBA's top single family legislative priorities, and we are very glad to see that policymakers on both sides of the aisle see the importance of this measure.
"The existing credit for first-time homebuyers has helped move a segment of potential homebuyers off the sidelines and into their first homes. By expanding it to qualified existing homeowners, we can help stimulate even more home purchases for qualified buyers. I also want to applaud measures in the bill that will help eliminate fraudulent use of the tax credit."
The Associated Press quoted Rep. Shelley Berkley that the bill "will allow more people to purchase a home in my district and help stop the continued downward spiral in housing prices caused by the foreclosure crisis." Shelly represents Nevada, a state that has been particularly hard-hit by the housing collapse.
Critics of the bill have said that it is merely accelerating purchases that would have occurred anyway and creating yet another artificial housing bubble.
Mortgage News Daily Managing Editor Adam Quinones said, "It is likely that the prior tax credit's Nov.30 expiration has already stolen a portion of housing demand from 2010. On a broader scale, the extent to which the tax credit extension adds new demand is a function of buyer's perception of home prices, liquidity in the secondary mortgage market, and the health of the labor market. Overall, while the home buyer tax credit extension is a net positive for the industry, there are still several structural ineffficiences that must be addressed before housing can gain recovery momentum".
In signing the bill President Obama stressed that the measure is revenue neutral and will not increase the deficit.
The NAR has published an informative page on the home buyer tax credit extension. READ MORE
READ MORE on the outlook for housing