While the economy still has a long way to go to recover, we are currently at an ideal time to buy real estate. It is true that there are a great many home owners who have underwater mortgages right now and a swelling on the horizon that is an indication of the next wave of foreclosures that’s threatening to hit the shores, but all of that foreboding probability is bad news for home owners who bought into the market during the boom years of the real estate bubble. Luckily for potential home buyers now, other people’s misfortune or unfortunate timing is resulting in opportunities that wouldn’t be even near possible even a few short years ago for many of them.
Currently, the value of real estate is still bottomed out; some experts say that prices may continue to drop slightly, but the bottom will most likely not be much lower that what we’re seeing at present they say. After the bottom is hit, it is anticipated that the increase in real estate prices will rise slowly which will give potential buyers more time to buy into the market at the lower prices. These lower prices have been helping many potential buyers to be able to afford to buy into the market where they had not been previously able to; while many other buyers have been able to buy larger homes or homes in more expensive neighbourhoods than were previously in their price range.
Added to the lower real estate prices is also the lower interest rate that is currently available on mortgages at present. Due to the Federal Reserve’s program of buying up mortgage-backed securities, the rates for 30 year terms have been held at between 5 and 6%. This program will continue until March 2010 at which point—unless there is an extension—the rates will likely rise over the rest of the year.
The other factor that is helping many people buy into the real estate market currently is the government’s Home Buyer’s Tax Credit that was extended from last fall. This credit has been a valuable asset for many people who are looking to buy homes across the country who may have needed a little extra benefit to get their foot in the real estate door. This tax credit will be ending at the end of April unless there is another extension from the government.
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