First-time homebuyers may be eligible for up to $8,000, while those who are trading up could get as much as $6,500. Either way, buyers have to be in contract by the end of April and close before July 1 to see the refund.
There is little sentiment for continuing this program, mainly because several think the latest version’s results were very disappointing.
That rush was less pronounced after the latest extension. The first version covered first-time homebuyers and netted huge sales jumps but the real estate market slumped over the winter and early spring.
So should you rush right out and put an offer in on that new home?
You should consider where you live. There are many places where home values are estimated to fall sharply over the next several months, including Los Angeles, Minneapolis, and most of Florida.
Prices in Miami are expected to fall 22.5% this year so waiting a few months could earn Florida residents a $48,000 price cut obviously a better deal than the tax credit.
On the other hand, some cities are projected to post record price gains this year, including Napa, CA.; Charleston, SC; and Cheyenne, WY. Home buyers in those cities would benefit by making their purchases this month.
Of course, there’s no promise that the forecasts will be correct, but they’re definitely something consumers should consider.
Home buyers get the total amount of the credit they are due even if that exceeds the amount of taxes they owe. If you’re a first-time buyer and your total tax bill for the year is $4,000, you get all that back plus another $4,000. Not a bad deal if you can get in on it.