In the past couple of months there has been a tremendous uptick in new home sales and home prices in the national housing market. The latest Case Shiller index report showed that national home prices increased for the first time in three years as the NHPI index rose 1.4%. This is good indication that the housing market has bottomed and will start to stabilize in the oncoming months. Many believe that the housing market’s recent recovery is largely attributed to the popularity of the first-time home buyer tax credit program.

For those that don’t know, the first-time home buyer tax credit is a part of the Obama administration’s American Recovery and Reinvestment Act. The credit -available until November 30, is solely open to first-time buyers and provides up to an $8,000 tax credit for qualified buyers that purchase a home. In order to qualify you must make under $75,000 if single and $150,000 if married. Also, in order to be considered a first-time buyer you cannot have owned a primary residence within the past three years.

In my opinion the best thing about the credit is that it’s refundable, meaning that if your tax obligation is less than the amount of the credit you will receive a refund via check from the government. Were the credit non-refundable you wouldn’t get any money back.

The deadline for the credit is fast approaching as the program is set to expire at the end of November. Recently in late May/ early June the FHA released that it would allow homeowners to apply the $8,000 first-time homebuyer tax credit towards the purchase of a FHA-insured home. This caused many to speculate that Congress would in fact move to extend the tax credit, however it is still up in the air as to whether they will do so. If you are thinking about buying a home, the tax credit in addition to the incredibly low mortgage rates available- the 30 year fixed fell to 4.94% last week, definitely makes now is as good a time as any, provided you’re in the financial position to do so.