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Thursday, September 2, 2010

Increased Affordability Helps Homeownership

By Jay Carlson, President
Florida Home Builders Association

Nationwide, housing affordability is at the highest level in at least five years. In fact, the National Association of Home Builders (NAHB) estimates that 55 million American households have the ability to make their dream of homeownership a reality today — up from 38 million two years ago. 

In Lakeland and Winter Haven, 71.6 percent of all homes that were sold in the fourth quarter of 2008 were affordable to families earning the median income of just over $50,000, compared to 39.7 percent at the end of 2007.   In Orlando, 61.9 percent of homes sold during the same time period were affordable to families earning the $59,200 median income compared to 31.3 percent in the fourth quarter of 2007. And throughout Florida, we’re seeing very positive affordability signs.

“This is an unprecedented opportunity for anyone who is considering buying a home,” said Jay Carlton, President of the Florida Home Builders Association. “Interest rates are historically low and there is still a great selection of homes on the market to choose from.”

Another incentive that is driving home buyers back into the marketplace is the $8,000 first-time home buyer tax credit which was included in the recently enacted economic stimulus package. The Treasury Inspector General for Tax Administration, which audits the IRS, reports that nearly 568,000 tax returns claimed a first-time home buyer tax credit as of March 6. 

The tax credit is available to first-time home buyers —defined as anyone who has not owned a primary residence in the past three years — who meet the income limit requirements and purchase their home on or after January 1, 2009, but before December 1, 2009.  The tax credit is equal to 10 percent of the home price up to a maximum amount of $8,000.

More information about  the tax credit, including eligibility requirements and the answers to frequently asked questions, can be found on the National Association of Home Builders’ tax credit consumer Web site www.federalhousingtaxcredit.com.

The choices for home shoppers, however, may start to narrow soon.  Sales of both new and resale homes increased in February.  This could be an indication that the housing market is reaching a bottom. 

“This is the perfect storm of benefits for anyone who is still trying to decide whether or not they want to make the leap from renter to home owner,” said Carlson. “Don’t lose out and take the chance of looking back years from now regretting that you didn’t take advantage of this great opportunity.”

For more information on the benefits of homeownership, visit www.nahb.org/forconsumers today.

Tax Credit for New Construction? ACT NOW!

First time home buyers wanting a new home and also wanting to take advantage of the $8,000 first-time home buyer tax credit must act immediately.

"We have received many inquiries from potential home buyers asking if a sales contract on a new home by the November 30 deadline will be sufficient to receive the first-time home buyer tax credit," said Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla. "They have been surprised to find out that they must move into the new home before they are qualified."

Home buyers may qualify for the tax credit if they purchase the home on or after Jan. 1 but before Dec. 1, 2009.  In the case of new construction, the date the home buyer takes occupancy of the house is considered the purchase date, not when the sales contract is signed.

Builders are ready and willing to work with potential home buyers, but time is running out to make those dreams a reality while also benefiting from the tax credit. It is important that home buyers understand the time requirements and get the process started with a home builder today if they want their new home completed in time to claim the tax credit.

In addition to the November 30 deadline, home buyers must also have not owned a home in the three years prior to the purchase and have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers in order to qualify for the tax credit. More information on the first-time home buyer tax credit can be found at www.FederalHousingTaxCredit.com.


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