If you're watching home prices head north and wonder how you'll ever come up with a down payment, your state might have a way to help. Enter so-called "first-time home buyer savings accounts." Various state legislatures have authorized these programs, which come with varying tax advantages for people saving up to buy a house. Oregon and Alabama recently joined about a half-dozen other states that have passed bills creating these options. Others are actively considering them.

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"The accounts are designed to provide renters with a tax-advantaged opportunity to save for their down payment," said Jared Walczak, a senior policy analyst for the Tax Foundation in Washington. "In some states, it's not just for first-time buyers, but for those who haven't owned a home in a number of years." First-time buyers are a shrinking portion of home sales. Last year, the share stood at 32 percent, according to a 2017 survey by the National Association of Realtors. That's lower than the long-term average of 40 percent. "That's statistically important," said Todd Umbenhauer, president of the Pennsylvania Association of Realtors. "Far fewer first-time home buyers are entering the market." At the same time, home prices continue to rise. Due largely to increasing demand and limited inventory, the nationwide median sale price has reached $238,800, according to Zillow. Values have gone up 8.7 percent over the past year and are expected to rise another 6.5 percent within the next year.

In some states, it's not just for first-time buyers, but for those who haven't owned a home in a number of years. Jared Walczak Senior policy analyst for the Tax Foundation

In Umbenhauer's state, there is bipartisan support for pending legislation that would create the tax-advantaged accounts. Specifically, first-time homebuyers or people re-entering the housing market in Pennsylvania would be able to put up to $50,000 over 10 years in a designated account. Yearly contributions — which would be tax-deductible on state returns — would be limited to $5,000 for individuals and $10,000 for married couples who file joint tax returns. Earnings also would be tax-free. Accounts could be opened at any financial institution operating in the state, such as banks and brokerages. Savers could open an account and name themselves or someone else the beneficiary. Like other states' programs, there would penalties for not using the money in a specified time, and the funds would be subject to rules governing things like transferring the account to another bank.

Expenses delaying saving for home purchase Expense All buyers Age 37 & younger Age 38-52 Age 53-62 Age 63-71 Age 72-92 Student Loans 49% 53% 25% 8% 8% <1% Credit cards 42% 32% 41% 30% 18% 14% Car loans 37% 32% 24% 14% 6% 3% Child care 20% 16% 18% 2% 2% 3% Health care 19% 12% 14% 19% 8% 6% Other 17% 19% 29% 46% 70% 78%

In other words, these accounts would operate similarly to 529 college savings plans, including the stipulation that the funds must be used only for qualified expenses. For example, a down payment and closing costs are among the home-buying costs that would be fair game. Supporters of the new accounts say factors like rising home prices and debt — often of the student loan variety — stand in the way of homeownership and these programs will help. Others question whether they will end up getting used by their target audience or become another tax shelter for the wealthy. "In Oregon, in some areas, the rent is so high that middle-class families can't save anything for a down payment," said Daniel Hauser, a policy analyst with the Oregon Center for Public Policy. "This [Oregon program] says if you save for a down payment, we'll give you a tax benefit. But you can't get that benefit if you can't save." More from Personal Finance:





The Oregon program will let individuals deduct up to $5,000 in contributions ($10,000 for married couples filing joint tax returns) per year beginning in 2019. The state also ended up imposing income limits for who can get the tax benefit: It starts phasing out for adjusted gross incomes of $149,000 or higher. Most of these programs have come into existence in the last several years, including in Iowa, Mississippi, Colorado and Minnesota. Montana was the trailblazer, establishing the accounts in 1998. In Virginia, where the accounts have been around since 2014, few taxpayers have claimed the allowed deduction for contributions.