Moderately priced homes are beginning to feel the benefits of Washington’s plan for recovery sooner than those at the upper end. The divide between the mass market and the high-end (generally defined as homes that cost above $750,000) is starting to grow as consumers have begun to take advantage of the $8,000 credit for first time home buyers. The $8,000 tax credit for first-time homeowners phases out for single buyers whose incomes exceed $75,000, or married couples earning more than $150,000. Low-interest-rate mortgages backed by the FHA and government-controlled mortgage companies Fannie Mae and Freddie Mac are only available on loans below limits set by Congress. Last year, Congress increased those limits to $417,000 in most markets, and to as high as $729,750 in certain high-cost markets, including parts of Hawaii, California, New York and Washington, D.C.
