Navigating the Housing Market: How the First-Time Homebuyer Act Could Change the Game

A New Lifeline for First-Time Homebuyers in a Competitive Market

Why Today’s Housing Market Feels Out of Reach

The dream of homeownership is becoming increasingly elusive for many first-time buyers. Surging prices, limited inventory, and fierce competition have created a perfect storm of challenges. Recent data highlights the severity of the situation:

• First-time buyers accounted for only 31% of sales in June 2025, down from 35% the previous year.
• All-cash purchases now represent 23% of transactions, sidelining traditional buyers.
• Homes sell in 17 days on average, with 89% of listings disappearing within a month.

With housing inventory at historic lows and demand skyrocketing, many aspiring homeowners are forced to delay their plans or explore alternative solutions.

The First-Time Homebuyer Act: A Potential Game-Changer

Proposed legislation could offer relief through a refundable tax credit of up to $15,000 (10% of a home’s purchase price). Modeled after President Biden’s housing initiatives, this program aims to reduce financial barriers for new entrants to the market.

Who Qualifies for the Credit?

Eligibility requirements include:

• No homeownership in the past three years
• Income at or below 160% of local median levels
• Purchase of a primary residence (not investment property)
• Home price within 110% of area’s median purchase price

Special Circumstances That Expand Eligibility

• Single parents who co-owned homes with former spouses
• Individuals who previously owned non-compliant properties
• Displaced homemakers with shared ownership history

How the Tax Credit Would Work

If enacted, the program would:

• Automatically apply when filing annual taxes
• Offer dollar-for-dollar reductions on tax liabilities
• Provide direct deposit refunds for credits exceeding tax bills

Navigating Current Opportunities

While this legislation remains pending, prospective buyers can explore existing programs through mortgage professionals. Loan officers can provide guidance on down payment assistance, government-backed loans, and other resources tailored to first-time purchasers.

Key Takeaways

• Historic market conditions favor cash buyers and quick transactions
• The proposed tax credit could offset up to $15,000 in home purchase costs
• Multiple pathways exist for buyers with unique housing histories