In a recent NY Times article, the author, Ron Lieber, makes a case for buying a home now, especially for first-time home buyers. The compelling reasons – low interest rates (which may go even lower soon), a $7500 tax credit and less competition from other buyers for homes that are on the market now.
First-time buyers are well situated in this market because they do not need to sell a home in order to buy their new one. Current homeowners are having to wait longer to sell their homes, so there are simply not as many buyers out there competing for properties. The tax credit, while certainly attractive, is in effect only through June of 2009. Interest rates today are around 5.375% after being at or above 6% for months making for more affordable mortgage payments. Also, there is strong support for the Federal Government to offer even lower interest rates (maybe 4.5%) in coming months to stimulate the housing market. Basically, if you have been considering buying a home, now is a good time to start looking.
What about refinancing your current mortgage? The potential plan to lower rates to 4.5% for home buyers is not expected to include refinancing, but rates are still low now and may yet go lower. I would suggest calling your lender to check on your current rate and let him or her know that you want to be contacted if and when rates drop further.
blog by elephant’s favorite realtor, Liz Benson