According to the Realtors Association of Southern Minnesota, first-time homebuyers are taking advantage of a program which offers an $8,000 tax credit for first-time home-buyers. The program, which was a part of the American Recovery and Reinvestment Act passed earlier in the year, is helping to stimulate the regional real estate market.
The Mankato Free-Press reports:
“Things are starting to pick up. The first-time homebuyers credit is helping and interest rates are good,” said Dick Norland of Midwest Realty in Mankato.
There were 933 existing homes sold in south-central Minnesota the first half of this year, very close to the 969 homes sold the first six months of 2008, according to statistics from the Realtors Association of Southern Minnesota.
Norland, who is president of the Realtors Association, said the $8,000 tax credit for first-time buyers is a boon to the market and will pay dividends for the economy next spring.
“I think that as a stimulus program, this may be providing more bang for the tax dollar than anything. Those people are going to get $8,000 next spring when they file their taxes and think what they can do — new carpet, landscaping, whatever.”
Economists and housing industry officials attribute many of the positive home-sales numbers reported nationally in the past few months to the tax credit.
"Somewhere in the neighborhood of 1.8 million people will take advantage of the tax credit, but we’re projecting an additional 350,000 sales this year as a result," said Walter Molony, a spokesman for the National Association of Realtors in Washington.
Nationally, there are 4.09 million previously owned homes and 271,000 newly built ones begging for buyers, so 350,000 additional sales is a big boost.
The tax credit’s success, like Cash for Clunkers before it, may be linked to its appeal to "fence-sitters," folks who wouldn’t necessarily be in the market for a new car or house if not for this new incentive.
Wayne Norris, regional sales director for Hanley Wood Market Intelligence, which tracks new-home sales here and elsewhere, said the tax credit had had its biggest effect on entry-level buyers.
"The market has been waiting for the urgency to buy for quite some time, and the tax credit provided that," he said.
The housing credit is providing both an immediate boost to regional real estate markets, stimulating the national economy, and bringing consumers into the housing market who otherwise wouldn’t be. That’s recovery in action.