Two Tax Credits and a Proposed Bill to Make Homeownership More Affordable
2024 is an especially difficult time to buy a house, especially if you are a first-time homebuyer.
The problem has gotten so bad that journalists have taken to saying that the only people who buy
houses these days are people who are selling one house to buy another, real estate investors, and
nepo babies whose parents have contributed money to the down payment. Interest rates are so
high that people who currently own their house are hesitant to sell for fear that they will not be
able to afford a mortgage on another house of similar size and value. This means that investors
are buying up an increasing share of the houses that are offered for sale, with the result that the
percentage of Americans who own their houses is decreasing.
All of these factors create a perfect storm for increasing wealth inequality. Therefore, the federal
government has introduced two new tax credits related to affordable homeownership, and U.S.
senators have proposed a bill to make it less easy for investors to dominate the residential real
estate market. To find out more about entering the home-buying market in interesting times,
contact a California real estate law attorney.
Tax Credits for People Who Buy and Sell Starter Homes
In 2024, President Biden offered a $10,000 tax credit to first-time home buyers. Of course, the
biggest obstacle for many prospective home buyers is not a $10,000 cash shortage, although they
could certainly use the money. Rather, the biggest obstacle is a lack of available properties to
buy. Therefore, the federal government is also offering a $10,000 tax credit to homeowners who
sell their houses to buyers who have never owned a real estate property before.
Proposed Legislation to Curb Tax Credits for Residential Real Estate Investors
In the fourth quarter of 2023, more than a quarter of residential real estate purchases, which
represents an increase of more than 25 percent in investor purchases since the end of 2022. It
also means that investors purchased a greater share of houses last year than in any other year on
record. These purchases tend to be concentrated in big cities where, not only are home purchase
prices expensive, but renting is also expensive. Senators Sherrod Brown of Ohio and Ron
Wyden of Oregon have proposed a bill that reduces the tax incentives for corporate investors that
buy residential real estate properties and then rent them out. If the bill becomes law, it will not
affect mom-and-pop landlords who rent out their empty nest after they move to a less expensive
house now that they are retired and no longer have to commute to work.
Contact SNR Law Group About Real Estate Purchases
A real estate law attorney can help you figure out how to navigate today’s real estate market and
benefit from incentives for first time homebuyers. Contact SNR Law Group in Tustin, California
to discuss your case.
Sources: Janet Yellen Says It’s ‘Almost Impossible’ For First-Time Homebuyers To Enter Housing Market
(yahoo.com)