In recent months, many people have begun to ask questions like, “Is now the right time to buy a home?" or "Has the housing market hit bottom yet?”
The short answer to both questions is, “I think so.”
Statistically, when mortgage rates are down, housing prices are normally up and vice versa. So what happens when mortgage rates are down and housing prices are also down like they are right now? I think it means that the market is about to shift from a buyer's market. This is something economists and real estate market watchers call “the bounce.”
Consider the real estate market in central New Jersey communities like Hamilton, West Windsor, Hopewell, Ewing, and Lawrenceville. After two solid years of steady decline, the prices of many homes in these markets have stabilized and in some cases have actually increased; add to that, unprecedented opportunities for first time buyers to get into the mortgage market and you have the perfect climate for the bounce.
As of this writing, 30-yr fixed rate mortgage rates have been tracking in the high 4% range. Additionally, first-time homebuyers can now avail themselves to FHA mortgage programs with as little as 3.5% down payments. Additionally, the federal government is offering a $7,500 tax credit to first-time homebuyers who qualify. Unfortunately, this program expires in June of 2009.
So, if you are a seller, some relief may be at hand. If you are a buyer (especially a first-time homebuyer), don't wait too long. As the saying goes, ya' snooze... ya' lose!