As we sit, the current homebuyer tax credit is now almost officially a thing of the past, as contracts must be signed by April 30, 2010 for first time and existing home buyers to take advantage of the tax credit. The question now becomes, what happens now that the home buyer tax credit is going away?
Certainly, while the tax credit has not been the cure all for the housing market, it has helped home sales and urged many new buyers to take advantage of this once in a lifetime opportunity. Now that it is going away, the looming question is how will affect the real estate market?
The immediate answer is that there will perhaps be some home buyers who go back to the sidelines and decide to wait to purchase, but that may or may not be the case and if someone is looking to purchase there are still many factors in their favor to purchase now.
· Interest Rates still remain at historical lows, but all indications point to interest rates rising over the next 12 to 24 months. Even if home prices do not rise much in this period, homes will become more expensive to finance in the coming year. Not too mention the increased fees we continue to see from the FHA and other lenders who are making financing more expensive going forward.
· Foreclosures still abound in the current market making for inexpensive homes. How long this last is anyone’s guess, but it will probably not be forever.
· Perhaps some additional tax credits will surface in the near future. With still many issues to work out in the market the government may bring some additional tax credit back to the market.
What this means is that even though the home buyer tax credit may be going away, it doesn’t mean right now is not an opportune time to purchase as there are still many reasons to buy in the current market. If you are looking to purchase, now may be the time to contact a mortgage broker to begin the prequalification process and real estate agent to begin searching for homes.