What a $15k Tax Credit Could Mean for Homeownership

first_img Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago in Daily Dose, Featured, Government, News Still, a tax credit wouldn’t fix all the obstacles that prevent homeownership—the study also revealed that those who already face such hardships—especially Black and Latinx potential homeowners, would benefit less than their White counterparts.”Even though a tax credit for first-time homebuyers would likely stimulate minority homeownership, it could still disproportionately benefit white and Asian Americans who are better positioned to buy because of better access to credit and higher incomes,” Zillow’s researchers noted. “Also, recipients could only benefit from the credit if enough homes at affordable price tiers are available on the market. Competition for homes remains fierce with homes selling at a historically fast pace. This strong demand, coupled with tight inventory, is contributing to rapidly rising prices, which could also inadvertently affect the utility of the tax credit for those who need it the most.” After the Great Recession in 2008 sent the housing industry into a tailspin, the Obama administration launched a tax credit for first-time homebuyers.The plan was to motivate consumers to buy their first home by offering them a tax credit of $7,500 in 2008 and $8,000 in 2009 and 2010 via the Housing and Economic Recovery Act (HERA).The credit expired a decade ago due to the terms of the legislation, but, now, President Joe Biden has floated a similar proposal, and researchers are examining what a refundable, advanceable tax credit of up to $15,000 for first-time homebuyers might mean to the market.A Zillow study suggests the tax credit, on top of the American Rescue Plan, which has already been signed into law, “could catapult millions of renter households into first-time homeownership.”The research, available in full on Zillow.com, showed that a $15,000 tax credit could cover the entire down payment for homes in 40 of the 50 largest U.S. metros.”Legislation that reduces barriers to homeownership could allow millions of renter households to finally enjoy the stability and wealth-building owning a home can provide,” Zillow Economic Analyst Alexandra Lee said.Considering the relatively low level at which renters are able to save, that $15,000 could push them as much as 14 years ahead toward home buying; it conceivably could cover the entire down payment.”In 2020, a 3.5% down payment on a typical home sold was less than $15,000 in 40 out of the largest 50 U.S. metros.  In 30 out of the largest 50 metros, even a 5% down payment on the typical U.S. home would be completely covered by a $15,000 tax credit,” Zillow reported. Sign up for DS News Daily Previous: Artificial Intelligence: The ‘Crystal Ball for Servicers’ Next: Home Renovations Rise in Wake of the New Norm Data Provider Black Knight to Acquire Top of Mind 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago  Print This Post About Author: Christina Hughes Babb Related Articles Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. center_img Data Provider Black Knight to Acquire Top of Mind 2 days ago Home / Daily Dose / What a $15k Tax Credit Could Mean for Homeownership Governmental Measures Target Expanded Access to Affordable Housing 2 days ago March 16, 2021 9,714 Views 2021-03-16 Christina Hughes Babb Demand Propels Home Prices Upward 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Best Markets For Residential Property Investors 2 days ago Share 1Save What a $15k Tax Credit Could Mean for Homeownership The Best Markets For Residential Property Investors 2 days ago Subscribelast_img read more