I also highly suggest that if you don't know "The Phoenix Real Estate Guy," then you should.
He makes all of us look like freshmen and if you click on the web reference and go to the easy to understand Tax Credit graphic that is downloadable to PDF, if you click on the web reference and go to the self-proclaimed "The Best Damn Real estate Blog on the Planet," then you'll see why.
My current clients intend to use their tax credit money toward the purchase of a new car. It would be a great boost to the economy if the auto industry could partner with the housing industry to create a multi-tier incentive to take advantage of this tax credit.
Let's face it., to a large degree, first time home buyers are already buying. They are taking advantage of the deflated pricing and the fantastic interest rates, and are jumping on the opportunity to stop paying someone else's (their landlord's) mortgage. Sure, this tax credit will be a nice way to add an even more compelling reason to get off the fence, but it's really just icing on the cake.
In my opinion, the place where it would have the largest impact would be with the middle market sellers who are having to take a hit on the sell of their home to make their way into another. It may give many of them an opportunity to be more competitve with the inevitable foreclosure down the street, knowing that they would have a little tax relief in their futures.
I guess it's obvious that I share Lisa's hopes that additional legislation would allow more home buyers to participate in the tax incentives. (Supposedly, Isakson is attempting to revive his version as a standalone bill.) Certainly, most homeowners receive tax incentives already by being able to claim deductions for interest from their mortgages. Even so, if the objective was to actually STIMULATE a recovery, I think that extending the tax incentive to the middle market would have a much broader impact.