President Bush recently signed a bill that could give greatly needed support to first-time home buyers. The new bill will provide a one-time refundable tax credit of $7,500 or 10% of the property´s purchase amount, for any homes bought by first-time home buyers between April 9^th and June 30th. The buyer will then have to pay that money back in $500 annual payments, to be deducted from their income taxes for 15 years, beginning in 2010.

In order to obtain the tax credit, the buyer must be able to qualify for buying and fully understand the terms of the plan.

According to Sandy Dunn, the president of the National Association of Home Builders (NAHB),“First-time home buyers make up about 40 percent of the entire market,... They don’t have a home to sell and they bring demand to the market. As more than 2 million anticipated first-time buyers enter the market and claim the credit, this will stimulate buying up the housing ladder.”

The new law will also provide FHA insurance for a program whose goal is to help save families from foreclosure. Ed Brady, a Illinois home builder, commented on the multiple aspects of the bill, saying that “Together, the first-time home buyer tax credit and foreclosure relief in the housing bill will help to reduce inventories,...In turn, this will firm up prices and send a signal that we are either at the bottom or very near the bottom and that there isn’t a better time to buy than today’s market.”

However, in order for these new changes to cause a big effect in the market, more promoting or educating of its availability must be done. A survey was recently put out by Market Tools at the request of Beazer Homes, and the results showed that 77% of those surveyed were not aware of the temporary tax credit, and that 29% of those surveyed said that the developing of the credit would raise the probability of their buying a new home sooner rather then later.