MICHIGAN, United States (WJRT) – A new bill that just passed into law could help first-time home buyers battle rising home prices and insurance rates.
Governor Gretchen Whitmer on Wednesday signed bills creating Michigan’s First-Time Home Buyers Savings Program.
It creates special tax-free savings accounts for people to accumulate funds to use when buying their first home.
This allows people to set aside money exempt from state income tax, as long as the maximum account balance does not exceed $50,000.
Starting this year, singles could receive up to $5,000 deduction each year and a $10,000 deduction for married couples.
Local real estate professionals say this is a big win for first-time home buyers.
“The housing market, the prices, are not going to come down anytime soon,” said Rob Moen, chief broker at Keller Williams First Real Estate.
It’s a tough time to buy a home, especially if you’re a first-time buyer.
“There are easily 15 to 20 homebuyers for every home on the market, which turns into a lot of competition with other offerings,” Moen said.
Moen says having an attractive offer can make all the difference.
“The offers that are floating around right now, if someone has a really big down payment or a big down payment – say 20, 30, 40 or even 50% on their purchase contract or their offer will be much stronger compared to someone ‘one who doesn’t have the money to deposit,’ Moen said.
Michigan’s First-Time Home Buyers Savings Program aims to help buyers have a bigger down payment ready and something that can be planned farther in advance.
“The idea was that parents and grandparents could put a little money aside each year while their kids and grandkids go to school,” Moen said. “Once they’re old enough to buy a house, they can use that money tax-free for them.”