LANSING, Mich. (WJRT) - A new bill just signed into law could help first-time home buyers tackle rising home prices and insurance rates.

Gov. Gretchen Whitmer signed bills on Wednesday creating the Michigan First-Time Home Buyers Savings Program. It creates special tax-exempt savings accounts for people to accrue funds to use on 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 go over $50,000.

Starting this year, single people could receive up to a $5,000 deduction each year and a $10,000 deduction for married couples.

Real estate professionals say this is a big win for first time home buyers.

"The housing market, the pricing, is not going to come back down any time soon," said Rob Moen, managing broker with Keller Williams First Real Estate.

It's a tough time to buy a house, especially for first-time buyers.

"There are easily 15 to 20 home buyers for every single home that is on the market, so that turns into a lot of competing against other offers," said Moen.

Moen said having an attractive offer can make all the difference.

"The offers that are flying around right now, if someone has a very large deposit or a big down payment, say 20, 30, 40 or even 50% down, their purchase agreement or their offer is going to be a lot stronger compared to someone who doesn't have the money to put down," said Moen.

The Michigan First-Time Homebuyers Savings Program is aiming to help buyers have a bigger down payment ready and something that can be planned for further ahead of time.

"The thought was that parents and grandparents can put a little bit of money down every year as their kids and grandkids are going through school," said Moen. "Once their old enough to buy a house they can use this money basically tax free for them."

 

 

ABC 12 News- Mallory Pearson 

February 10, 2022 Updated February 11, 2022