The Urban Institute recently found that 53 percent of renters said that they couldn’t afford a down payment to buy a home. Many states are instituting tax-favored savings accounts to help first-time homebuyers.
Generally, these new measures allow first-time homebuyers to save for a down payment and closing costs in a savings account. The New York Times reports that in some states, homebuyers get a tax break for their contributions by deducting the amount they’ve saved that year from their state income tax returns. In Mississippi, potential homebuyers can set aside up to $5,000 annually for couples, and $2,500 for individuals.
Down payment accounts may be helpful, said Adriann Murawski, state and local government affairs representative with the National Association of Realtors, because rising home prices have made it harder for buyers to come up with the money for them. The association and its state counterparts have actively promoted legislation creating the accounts as a way to help spur home buying.
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