INTEREST IN FIRST-TIME BUYER CREDIT APPEARS TO BE WANING!
NEW, $8,000 FIRST-TIME HOMEBUYER CREDIT SEEMED ALLURING AT FIRST - NOW, HARDLY NOTICED!
Several weeks ago, after the new $8,000 credit for most first-time homebuyers was enacted into law, our Chicago Real Estate Team saw a surge of interest from qualified buyers looking to save a considerable sum on their first home.
The City of Chicago has a similar program - Tax Smart - which provides qualified first-time buyers a $2,000 tax credit for as long as they own their home, subject to certain conditions.
In addition, mortgage rates are at a near 50 year low, approaching the lowest rate in five decades for the best-qualified borrowers.
In recent weeks, interest in the first-time homebuyer's credit appears to have waned among our clients. We have had few inquiries on the rather-substantial credit over the last few weeks.
As summarized by Mary Ellen Podmolik in today's Chicago Tribune, the frustration is not simply local. Based on a survey by Move, Inc, affiliated with the National Association of Realtors, nearly 50% of the 1,005 questioned were not aware of the U.S. Tax Credit.
The new $8,000 credit need not be repaid. An earlier $7,500 credit, in effect last year, required repayment over a 15-year time period, or sooner if the subject home was sold before the end of 15 years. First time homebuyers would need to close between January 1 and December 1, 2009 in order to qualify.
In the survey, only 18% of respondents indicated they would take advantage of the credit. However, the group to which the credit would apply - first-time buyers - is a growing proportion of total home buyers. Across the U.S., according to the National Association of Realtors. 41% of homes sold last year went to first-time buyers, compared to 39% in 2007.
Last February, sales of existing homes posted its biggest month-to-month sales gain in five years. The American Recovery & Reinvestment Act was signed into law by President Obama on February 17th.
In many cases, however, concerns about job cuts, as well as the likelihood for only modest home price appreciation in the near future, have created fear among many home buyers, forcing them to the sidelines rather than buying a new home.
Podmolik's article contains a link to a new video by the Illinois Association of Realtors encouraging qualified first-time homebuyers to take advantage of the tax credit.
DEAN MOSS & DEAN'S TEAM CHICAGO
