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What is the proposed First Down Payment Homebuyer Tax Credit?

  • by Cami Morrill
  • Mar 15, 2021, 14:58 PM

Additional help could be on the way for first-time homebuyers. As a candidate, President Joe Biden proposed the First Down Payment Homebuyer Tax Credit, which could be significant in aiding potential first-time homebuyers. For starters, the credit could be used to cover all or a considerable share of a buyer’s down payment. With home prices rising ever higher, any down payment assistance is welcomed when a family is looking to buy.

For years, aspiring minority and millennial homebuyers have struggled unsuccessfully to save enough for a down payment. Sky-high student loan payments along with ever-increasing childcare costs and other urgent needs have made the goal of buying that first home elusive for too many Americans. Add to that the financial hardships brought upon us by the COVID-19 pandemic, which has hit minorities and lower-wage workers particularly hard. These demographics would immediately benefit from the Biden proposal.

Down payment assistance – in this case, up to $15,000 – could make all the difference in helping hopeful buyers get a foot in the door, as well as making the credit advanceable would mean buyers could access the funds upon closing rather than having to wait until next year when their tax return is filed and their refund arrives.

That said, policies to increase the supply of homes are equally important. As we take a look at the current housing market and mortgage data, we see an upward trend. For instance, existing-homes sales totaled 5.64 million in 2020 – their highest level since 2006, before the Great Recession – with mortgage rates at all-time lows. However, while demand is high, supply is registering at a 50-year low. This means home prices will continue to soar unless more residential units can be created. So, tax and other incentives which increase supply are equally important in order to keep home prices affordable. The Snohomish County-Camano Association REALTORS® (SCCAR) will continue to advocate for the building of more affordable housing because, in addition to increasing the housing supply, it will provide a boon for our struggling economy.

In efforts to help increase local housing inventory, as well as educate the public on affordable housing, SCCAR launched “Unlock the Door for Affordable Homeownership Snohomish County” campaign. SCCAR’s President, Jennifer Pederson, stated, “I am excited to help lead efforts to encourage policies and ideas which allow all our neighbors to achieve the American Dream of homeownership.” To learn more about SCCAR’s efforts to increase local housing inventory, please visit www.unlockthedoorsnoco.org.

For more information about buying or selling a home be sure to work with a REALTOR®, a member of the National Association of Realtors®. Snohomish County-Camano Association of REALTORS® is the voice for real estate in Snohomish County. If you have questions for The Expert about real estate email us at info@sccar.org, or by visiting www.sccar.org.