Nearly Half of Home Buyers Unaware of Tax Credit

Move, Inc. has released a new survey.

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The Obama administration is hoping that a recently enacted tax credit can generate housing demand and help mop up the existing unsold inventory. But according to a survey commissioned by Move, Inc.--which operates Realtor.com--nearly half of home buyers don't even know the tax credit exists. At the same time, almost a third say it is too small to get them into the market right away.

[See First-Time Home Buyer Tax Credit: 6 Things to Know]

From Move, Inc.:

From the press release:

(March 23, 2009) – While half (52%) of all Americans are concerned they or someone they know will face foreclosure in the next six to 12 months, 23% of adults plan to purchase a home in the next five years, and more than half of them (53.5%) are first time homebuyers, according to a new survey commissioned by Move, Inc...

The Move survey also found nearly one out of five homeowners (18.9%) plan to take advantage of the administration’s new program to help prevent foreclosures. While searching for answers in the past 12 months, 21% of all homeowners with a mortgage contacted a lender to restructure their loan. Half (10.6%) of those homeowners that contacted their lender experienced success while 5% still await an answer.

Unemployment is a driving factor causing many Americans to fear foreclosure, according to the survey. More than a quarter (27.1%) of adults feel they or someone they know may default on their mortgage due to recent unemployment (27.1%), future unemployment (29.3%), or because they owe more on their home than it’s worth (25.6%). One out of eight (15.4%) is having a hard time making mortgage payments because they’ve recently increased, or because they have too much debt (18.8%)…

Despite today’s challenging market conditions, 18.1% of adults plan to buy a home this year in order to take advantage of the $8,000 tax credit recently passed by Congress in the administration’s economic stimulus package…

The Move survey found the housing downturn, now entering its third year, has created significant demand for homeownership especially among first-time homebuyers. While 5.8% plan to purchase a home in the next 12 months, 12.8% of Americans say they plan to buy a home in the next two years, and 11% plan to purchase a home in two to five years.

Over half of those planning to buy in 2009 are first-time homebuyers (53.5%). By comparison, 41% percent of homebuyers in 2008 were first-time homebuyers, according to the National Association of Realtors…

While 18.1% of homebuyers do plan to buy this year to take advantage of the $8,000 tax credit, nearly half (47.6%) said they didn’t know about the credit and 29.3% said it wasn’t large enough for them to act right now. Potential homebuyers with higher incomes are more interested in the tax credit than those in lower income brackets, as 43.4% of first-time buyers earning $50,000 or more say they plan to use the tax credit.