The Senate has passed a bill that would greatly help the U.S. housing market get back on its feet. The amendment is part of the multibillion-dollar Economic Stimulus plan being ironed out in Washington as we speak. Under the legislation, home buyers who buy within a year of its enactment could receive an income tax credit for up to $15,000 or 10% of the purchase price. The credit (unlike the current first-time home buyer tax credit) is available to all buyers who are purchasing a primary residence and would not need to be repaid. Homes sold within two years of purchase would be ineligible for the tax break—the point is to reduce the supply of unsold homes until the market can restabilize.
The new measure would be a huge shot in the arm for today’s buyers and is expected to get a lot of fence-sitters out into the market. Many economists believe a jumpstart in buyer activity and a decrease in housing inventory would help get the economy going in the right direction for recovery. The amendment is still in limbo until the full Economic Stimulus Bill is finalized and passed. But it is pretty certain that housing will be a major part of the plan and many buyers will benefit from this new initiative.