Bryan Hendersen asked:


using crisis grew and the credit markets sputtered and fell, many first time home buyers became not only hesitant to purchase a house, but found getting a loan more and more difficult. Add to that the fact that the job market was quite uncertain and you had an environment in which home purchases became stagnate.

To break up this log jam, the government put in place a set of unprecedented stimulus packages to help prop up a weakened economy. These packages ranged from financial institution bail-outs to cash-for-clunkers which offered incentives for car owners to trade in their old gas guzzlers for more fuel efficient vehicles.

The centerpiece of the Obama stimulus package to spur home purchases is an incentive directed at first time home buyers to purchase a new home with a tax credit for up to $8,000. The initial Obama stimulus package included a tax credit up to $15,000, but was decreased to the $8,000 limit in its final form. This first-time home buyers incentive was put in place to cover homes purchases from January 1st and December 1st of 2009. There are several restrictions on this incentive including that the fact that home must be a primary residence and that the house cannot be sold within three years of the purchase. There are also income restrictions on this tax credit.

As with many of elements of President Obama’s stimulus package, the home purchase tax credit has its critics, but this effort has been credited with spurring home purchases after the recent economic downturn. Home sales have been trending up across the country throughout 2009 and the market is showing signs of recovery for 2010.

Nicholas