State incentive for homebuyers seen boosting market
FINDING A PLACE: Previously renters in Providence, Scott and Heather Wade bought a home in Cranston and will benefit from a new tax credit for first-time homebuyers. They’re pictured above with daughters Sadie, center left, and Siduri.
The $1,500 tax credit adjunct university professor Scott Wade expects to claim next year as a result of Rhode Island’s new incentive for first-time homebuyers wasn’t the reason he bought a three-bedroom bungalow in Cranston last month.
After years renting in Providence, he and his wife were ready to own and the thousands of dollars they will save over the life of their mortgage because of Rhode Island Housing’s new FirstHomes tax-credit program was just icing on the cake.
But given the tax windfall, Wade said the credits would have been a significant motivator if he had known about them and should be for other renters looking to make the jump to ownership.
“It’s absolutely an incentive,” said Wade, who teaches at both the University of Rhode Island and Roger Williams University. “There is a lot of extra cost to owning a home that we hadn’t planned on, like maintenance, buying a lawnmower and that kind of stuff. This money is really going to help.”
Now a few years into a steady, if slow, housing-market recovery, this would seem to be late timing for Rhode Island to launch a new real estate stimulus program.
After all, three years ago, both sales volume and median property prices were at their lowest levels in decades and needed a boost more than they do now.
But Rhode Island Housing Executive Director Richard Godfrey said even though it is improved, the housing market could still use a boost and FirstHomes was the best tool at the agency’s disposal.
“We wanted to do something that will aid homebuyers and kick-start the overall real estate sector,” Godfrey said. “Although this only applies to first-time buyers, that is the entry into the market that starts everything off. It is a real incentive and stimulus, and creates some enthusiasm.”
He also acknowledged that the driver for the program’s timing had to do with the vagaries of federal law and state finance more than strategic considerations.