First-Time Tax Credit: IRS says about 55,000 in Michigan used the break

On top of getting a great bargain on their first home, Peter and Nell Welch also qualify for the first-time home buyer tax credit.

The couple purchased a 3,400-square-foot home with four bedrooms and three bathrooms in Grosse Pointe Farms. They paid $145,000, compared with the $350,000 the previous owner shelled out in 2005.

The $8,000 tax credit enticed them to buy now, before the current credit expires Nov. 30.

"We've pretty much been looking for the past year," Peter Welch, 28, said. "It was neat because we were able to go right into our dream house rather than buy a starter home and live there for a few years. It's nice to know we can live here for 30 years and be happy."

The tax credit was part of the American Recovery and Reinvestment Act, enacted in February. The credit is 10% of the purchase price or up to $8,000.

Realtors and builders want the credit extended through Sept. 30, 2010. Housing industry groups say the credit has helped sell 350,000 homes nationwide.