$15,000 Tax Credit Doesn't Make The Cut

Wouldn't have assisted many low income buyers anyhow

The proposal was changed to $8,000 and limited to first-time buyers or those who haven't owned in the past 3 years. It seems the repayment requirement on the current $7,500 first-time buyer credit will be removed and the incentive will now be available until November.

While the larger credit would have brought an estimated 500,000 home sales, the credit would have only supplied the full amount to families with income tax liabilities over $7,500 for two years - or an income of around $82,000 a year. Lower income families would not have benefitted nearly as much, as the purchase price and income tax liability would not take advantage of the full credit amount.

With the new proposal removing the repayment requirement (which was often confusing to buyers and reduced their motivation) and raising the amount to $8,000, more buyers should take advantage of the credit and move off the fence into making a home purchase. This could add 200,000 additional home sales, reducing excess inventory and help stabilizing the market.