Buying a home has become increasingly out of reach for Americans, who are grappling with a double whammy of high interest rates and surging home values. In his State of the Union address on Thursday, President Joe Biden proposed a new tax credit that would provide $10,000 to first-time home buyers. Biden is also proposing a separate $10,000 tax credit for current homeowners who sell their 'starter home' in order to jump into a bigger house.
The Federal Reserve is expected to cut its key interest rate later this year, which would ease the cost of borrowing for all types of loans, from mortgages to credit cards.Who would qualify for the tax credits?First-time homebuyers would qualify for an annual tax credit of $5,000 per year for two years, for a total of $10,000.The one-year tax credit for current homeowners would be available to people who own starter homes, defined as homes below the median home price in their county.