Federal Tax Credit Boosts Home Sales

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The federal tax credit for first-time home buyers expires at the end of April, and it appears many Americans don't want to miss out. New home sales rose all over the country, especially in the south.

In Wilmington, N.C., there is an abundance of homes for sale.

A Temporary Boom?

"I just don't know what's going to happen after May 1 when that draw or that attraction disappears," mortgage consultant David Flory said.

That draw is an $8,000 tax credit for first-time home buyers and a $6,500 credit for current homeowners who buy and move into another property.

Flory said the extra cash has led to a boost in home sales compared to last year.

"For some folks, yes it is a strong incentive," he said. "And for other folks, it's there. It's a good opportunity."

What is happening in Wilmington is a reflection of home sales around the country.

The Commerce Department reports that sales of new homes jumped 27 percent last month, rebounding from the previous month's record low. March was the strongest month since last July and the biggest monthly increase in 47 years.

Who Qualifies

Existing home sales were also better than expected.

"The $8,000 as well as the $6,500 tax credit has been a God-send to our builders, and they've seen a dramatic increase in sales prior to what the market was seeing before the credit came into effect," said Lindsay Fletcher with Wilmington and Cape Fear Home Builders Association.

But not everyone qualifies. A prospective buyer's credit rating and income are factors.

"The hard part will be towards the end of the week, when we get to a push come to shove, to find out if they're really qualified or not so they can write that contract," Flory said.

To receive the tax incentive, a person's house must be under contract by April 30. Mortgage lenders and realtors suggest buyers get their paperwork started right away.

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Mark Martin is a reporter and anchor at CBN News, covering various issues from military matters to alternative fuels. Mark has reported internationally in the Middle East and traveled to Bahrain to cover stories on the U.S.S. Dwight D. Eisenhower. Follow Mark on Twitter @MarkMartinCBN and "like" him at Facebook.com/MarkMartinCBN.