House-hunting typically slows in winter, as people put their searches on hold for the holidays. But this winter might be different, thanks to the extended - and expanded - first-time home-buyer tax credit.
"We're going to see far more interest in the fourth quarter than we generally do because of the tax credit," said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site Nov. 5, the day Congress approved extension of the credit, she said.
The new law extends the tax credit for first-time buyers and opens it up to some current homeowners as well. The credit is now 10 percent of the purchase price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.
All buyers must have binding sale contracts in place on or before April 30. Sales must close on or before June 30.
To be considered a first-time home buyer, an individual must not have owned a home in the last three years. And to be eligible, current homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased.
The credit is for principal residences only.
Income limits have risen, as well. According to the IRS, the credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
Interested in buying a house and claiming the credit? Don't procrastinate. Getting an early start will give you a better chance of finding the right house before the deadline.
Don't count on another extension, experts say.
Once the housing market has stabilized, there will be no need for one.