Homebuyers cashing in $8,000 tax credits
First-time homebuyers around the country have started to cash in on their tax credits from the Recovery Act.
NEW YORK (CNNMoney.com) -- Hundreds of thousands of first-time homebuyers across the country have begun to claim their tax credits, according to new government data released on Friday.
So far, nearly 315,000 people have claimed the tax credit after filing an amended 2008 tax return, according to a Treasury Department report on the status of the Recovery Act.
California led all states with 42,304 claimed credits.
Eligible first-time homebuyers can claim the credit of up to $8,000 -- or 10% of the home's value, whichever is less -- on either an amended 2008 return or on their 2009 return.
Treasury's figures more than likely sharply underestimate the real number of people who have taken advantage of the credit because many homebuyers have not yet claimed it on their tax return.
According to a recent National Association of Realtors survey, about 1.1 million first-time homebuyers have used the credit. NAR expects that number to grow to about 1.8 million by the time the credit expires on Nov. 30.
The discrepancy between Treasury and NAR probably stems from the fact that a majority of eligible first-time homebuyers have opted to wait to file for the credit on their 2009 returns, which they can file in early 2010.
State-by-state data. The Treasury figures show how some of the hardest-hit states during the housing downturn are now among the states with the largest numbers of claimed tax credits.
California, Georgia, Florida, Arizona and Michigan are all in the top 10, when it comes to claiming the credits. Though part of that is likely skewed by population figures, other large states like New York and Virginia have been left in the dust.
"We're seeing some big increases in many of the areas with the biggest price corrections," said NAR spokesman Walter Maloney. "That's no coincidence."
A National Delinquency Report from the Mortgage Bankers Association showed that California, Florida, Arizona and Nevada combined accounted for 44% of all foreclosure starts during the quarter. Last quarter, the Cape Coral metro area in Florida recorded the largest decline in home prices: 52.8% to $84,000, according to a NAR report.
After California, Texas and Florida were the next states with the largest number of claims, with over 29,000 each. Arizona had nearly 9,300 claims and Nevada rounded out the top 20, with 5,259.
Most of the smaller states made up the bottom of the list, with Vermont's first-time buyers bringing up the rear, claiming just 351 credits.
Applying for the credit is as easy as filing income taxes. First-time homebuyers just have to claim it on their return -- no other forms or papers have to be filed.
National Association of Realtors estimated an extra 350,000 sales will occur this year, solely because of the credit. The National Association of Homebuilders, more conservatively predicted 165,000 extra home sales.