Should I Buy A Home Now?

Now or Later?

Well, that depends. It depends on you. If you plan to live in your home until we get through this real estate cycle – 5 to 7 years – now could be the right time for you. There are some great arguments for buying a home now but if it’s not the right time, then it’s not the right time.

Some are waiting for the bottom of the market. I’ll tell you what, I watch the housing market every day, I can’t tell you if we’ve hit the bottom or not. I wish I could and so does everyone else. Timing is about you. If you’re ready, read on.

Answer these questions: Yes No
Are you married and is your modified adjusted gross income less than $150,000?
Have you and your spouse had NO home ownership in the past three years?
Do you plan to stay in the new home for at least three years?

If you answered Yes to all three of these questions, you may be eligible for the $8,000 first-time buyers tax credit.

Reasons to Buy NOW

  • First-time buyers get up to an $8,000 tax credit that doesn’t have to be repaid
  • Tax savings, appreciation, and amortization dramatically reduce the monthly cost of ownership
  • Selection of homes is still good and prices are lower giving you a greater opportunity to find the home you want
  • Interest rates are lower than they’ve been in 50 years allowing you a lower cost of ownership

This is a revision of the tax credit first established in 2008.  A very important change is that if the home is purchased between January 1, 2009 and December 1, 2009, the tax credit doesn’t have to be repaid.  However, if the home ceases to be your principal residence within three years of purchase, the tax credit must be completely recaptured.  This would include converting the home to rental property.

Many people don’t understand the significance between a tax deduction and a tax credit.  A tax deduction reduces income subject to tax but a tax credit is a dollar for dollar reduction in tax liability.  An $8,000 tax deduction would result in $2,240 tax savings for a 28% taxpayer.  Whereas an $8,000 tax credit would result in $8,000 in tax savings for the same 28% taxpayer.

For more information, see Form 5405 available on  This information is not intended to substitute for professional tax advice.

Vicki Moore About Vicki Moore

RE/MAX Star Properties
282 Redwood Shores Parkway
Redwood Shores, CA 94065

By Phone:


  1. Sjs says:

    Hi Vicki,

    Long time listener first time caller :)

    Thanks for the details above, in your opinion what tax benefits are there in the stimulus for Singles making close to $150K / year.



  2. Vicki Moore says:

    Hi Sj – So glad I’m not the only one reading my posts. :)

    The best info you’re going to get is from your tax person. So to be sure you qualify and to get the real deal on the info, call him/her.

    There are currently two programs for buyers here in CA; one is federal and one is from the state.

    For first-time buyers (haven’t owned a home in 3 years) buying their primary residence (not a rental house) there’s an $8000 tax credit. For more info:

    If you purchase a brand new home there’s a $10,000 tax credit.

    In addition to what’s in the stimulus there’s mortgage interest; and some of the expenses you have during your purchase are tax deductible.

    So the benefits are $$!


Speak Your Mind