First-Time Home Buyers Take Note

There are two factors in the market place at present that have a very important bearing on first-time home buyers.    The first is the government tax credit of $8,000.00.  If you qualify for the credit, you must purchase and close on or before November 30th of this year.  With the average time to close a  standard sale from date of contract standing at approximately 45 days, it won’t be long before that November 30th date is a real factor.  Short-sales (that’s a home that is worth less than the mortgage against it) can commonly take four to six months to close after a contract offer is submitted–keep that in mind with that November 30th deadline looming.

A second important factor at present for first-time home buyers (and all other buyers for that matter, except those paying all cash) is that mortgage rates have moved up about 100 basis points (each basis point is equal to 1/100 of one-percent, so a 100 point basis point move is 1.0%) in the past month or so.  The good news is, rates are still below 6.0% for well-qualified buyers, which historically speaking, is still a very good rate.  The bad news is many economists think that rates will continue to move higher, especially with the spectacular deficit spending at the Federal level.  I personally believe rates will continue to move higher from this point, but obviously, neither I, nor anyone else knows for sure.  But it is a fact that today’s rates are very low compared to the last 30 plus years.  In 1977, when I bought my first home, I paid 8.25% for my 30 year fixed mortgage; a very good rate at the time.

The bottom line–if your job situation is secure, the two factors listed above are very compelling reasons to pull the trigger on a home purchase.

One more thought–I wish you and yours a safe and festive 4th of July!!

Will Richardson

MBA, RE/MAX Hall of Fame

RE/MAX Town & Country

214-543-7600-cell