I received an article from a lender that I thought was good information to pass along to buyers waiting in the wings to buy a home.

To summarize:

  • Buyers want to wait for the lowest home prices but they may miss out if interest rates go up.
  • In many markets, the rate of decline is stabilizing.
  • Property values in many areas have declined to 2003 levels or lower.
  • These properties are receiving multiple offers.
  • Interest rates have been bouncing between 4.50%-5.00% for a 30-year fixed rate.
  • If you get an interest rate under 6.00% you are getting a great deal as this is not historically typical.
  • In the last two weeks, interest rates increased between 0.50%-1.00% on fixed loans.
  • Another 1.00% increase in rates would give you a higher payment even if property values decreased by 10%.
  • If you continue to wait, your payment may be higher even if property values decrease further.
  • First-time homebuyers (buyers who haven't owned in 3 years) are eligible for the $8000 tax credit. This is free money. To get the credit, you must take ownership of the home by December 1, 2009.

If you want to buy a home and take advantage of the free money, now is the time to do it. I suggest you start looking for a home very soon to be able to be in your new home by December 1. From my recent experiences in helping homebuyers buy in the Central Valley (specifically Tracy, Lathrop, and Stockton), there have been multiple offers on many properties and it may take a while to get your offer accepted by the seller.