There’s a lot of people just waiting to see what the market is going to do but most people’s opinion time is running out to take advantage of the market. Here’s a couple things to consider-
Interest Rates – Rates are at the lowest point since Eisenhower was President. Can they stay there much longer? The answer is most likely NO they will begin to creep up this spring as the Feds stop supporting the lower rates. What this means is as the Fed withdraws funding the rates will begin to move up and even a ½% increase could force you to buy a small home for the same payment you could have had right now. Here’s a brief article I read this morning.
The Fed plans to end a $1.25-trillion mortgage-bond-purchase program that has helped keep mortgage interest rates near a record-low 5% next month. The Fed has been buying virtually all the mortgage bonds churned out by mortgage giants Fannie Mae and Freddie Mac, replacing private investors such as pension funds and mutual funds that have shied away since the subprime mortgage crisis. That exit is expected to push up rates, which could weigh on buyers at a time of high unemployment and anemic consumer spending.
The Mortgage Bankers Association, an industry trade group, predicts the end of the Fed mortgage-bond program could push rates up by roughly 0.5 %. For a $500,000 fixed-rate mortgage, that would increase the monthly payment by $155.
Even a moderate rise could push potential buyers out of the market.
Higher rates could force many others to recalculate where to live or what to purchase. “If those rates jump up to 5.5% or 6%, then buyers can’t qualify for what they thought they could qualify for, and they’re not going to be able to buy as much house as they thought they could,” said Frank Drury, a loan originator at Cobalt Financial Corp. in Huntington Beach, Calif.
A popular home buyer’s tax credit is scheduled to lapse at the end of April. It provides tax breaks of up to $8,000 to first-time buyers and up to $6,500 for some homeowners who move up to middle-market homes costing up to $800,000. The credits were originally scheduled to lapse in November 2009, but were extended over concerns that home sales would slow without the incentive.
Home Prices – Have we hit the bottom? I guess that depends on where you’re buying and what price range you’re looking in. The active adult communities in the west valley of Phoenix Arizona have seen prices stabilize and some are even moving up. My question is always “How will you know we’ve hit the bottom”? For most people sitting on the fence, the bottom will pass them by and months after prices start going up they will realize they’ve missed it and either be priced out of the market or pay more for the home.
Selection- Although the number of homes for sale in the Phoenix area has dropped there is still a great selection of homes for sale. This means you’ll have more to choose from and most likely be able to find the home you really wanted versus settling for something less than that.
Tax Credit- First time buyers as well move-up buying are running out of time. Everything we hear says the tax credit for buying a home will not be extended so why would you not take advantage of $8,000 or $6,500 for buying a home? Remember you have until the end of April to be under contract and the end of July to close…..don’t miss this opportunity!
Jay Otlewski
RE/MAX Integrity
Direct Line 623.271.4234 or Jay@RetiringtoAz.com
www.RetiringToAz.com www.valleyREadvisor.com www.ThePhoenixRealEstateAdvisor.com www.PhoneixHomeRescue.org
Posted via email from Active Adult Living
