Legislation recently introduced in the U.S. Senate would help more Americans buy their first homes.
The Uplifting First-Time Homebuyers Act, S. 2867, would increase the Individual Retirement Account (IRA) tax exception withdrawal limit for first-time homebuyers from $10,000 to $50,000. The money could be withdrawn without incurring the standard 10 percent early withdrawal penalty.
U.S. Sens. Ruben Gallego (D-AZ) and Todd Young (R-IN) introduced the bill on Sept. 18.
When Congress created the tax provision in 1997, the median home price was $115,000. Today, that figure has risen to $410,800.
“Homeownership is the cornerstone of the American dream, and for good reason,” Gallego said. “Owning a home is a proven way to build generational wealth and retirement security. But too many young Americans feel like that dream is out of reach. By updating the decades-old IRA homebuyer exception to reflect the reality of housing costs today, this bill helps make homeownership possible for the next generation.”
The bill has the endorsement of the Chamber of Progress, the Mortgage Bankers Association, the National Housing Conference, the National Community Reinvestment Coalition, the National Coalition for the Homeless, the National Association of REALTORS, and the National Association of Hispanic Real Estate Professionals.
“True no-brainers are rare in public policy, but allowing federal home-buying incentives to catch up to the reality of housing prices is as straightforward as it gets,” said Jesse Van Tol, President and CEO of the National Community Reinvestment Coalition.
The legislation is under consideration in the U.S. Senate Finance Committee.