Do Rising Mortgage Rates Signal the End of the Buyer's Market?

[Oct 27, 2009.]

 

Rising mortgage rates, reports of a (slowly) recovering housing market, and the pending expiration of the first time home-buyer tax credit could inspire would-be home buyers to get in while the getting remains affordable. The S&P/Case-Shiller home price index indicates a 1% increase in home prices within the last month in twenty key areas, but home prices are still down an average of about 11% over the same time last year.

As first-time home buyers scramble to close mortgage loans before the federal tax credit program expires on November 30, there is talk of extending the program until sometime next year; proposals allow for extensions from March 2010 to December 2010, but nothing is cast in cement yet. It seems likely that the Senate will extend the program as economic forecasters suggest that home prices could fall another 5% to 8% after the program ends. It's possible that an extension of the home buyers' tax credit would allow all buyers with incomes under $300,000 to qualify. This could further fuel the housing market.

Rising Unemployment Discouraging Buyers

In spite of near-record low mortgage rates, and great deals on homes, many consumers continue to wait on buying a home or shopping for mortgage refinancing. Economic uncertainty and fear of unemployment have consumers in a holding pattern that doesn't bode well for the housing market. Those of you who are confident about buying now can likely find significant incentives offered by home builders and anxious sellers of existing homes.

Mortgage Rates: Not the Only Game in Town

If you're financially prepared to buy a home or are looking for mortgage refinancing, get mortgage quotes from several lenders and see what's available. This remains a buyers' market, so aggressively negotiating the terms of your home purchase and mortgage can potentially save money. You can prepare for getting the best mortgage rates include improving your credit scores and increasing your down payment.

Online Mortgage Calculator Tools: Shop and Compare Mortgage Loans

The best reasons for buying a home are that you want to and are financially prepared. Don't get pressured into buying a home before you're ready. Researching home loans, getting mortgage quotes, reviewing your credit reports, and using online mortgage calculator tools can help you plan for buying a home. You, your home, and your mortgage will likely spend several years together, so taking time to find the home you want, and financing it with a home loan that matches your finances can help ensure your enjoyment of your property for years to come.

 

About Author:

Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.