After Thanksgiving every year, retailers remind us of how many shopping days are left before Christmas Day arrives.  Prices are slashed, store hours are extended, and gift buying becomes very busy.

I think of the home market during the first half of 2010 in the same mind frame as Christmas shopping.  “Hurry first time homebuyers, the IRS $8,000 tax credit expires June 30, 2010.  You have __ shopping days before your contract must be secured on April 30, 2010 to qualify”. “If you are a current home owner who can qualify for the $6,500 credit, the same time rules apply”. 

Speaking of time, another event that will happen, or end, in March 2010 may motivate potential home buyers to move quicker too.  The Federal Reserve has indicated that they will cease their purchase of mortgage back securities, which has been in process for over 16 months, at the end of March.  The consensus from most economists is interest rates will start to rise, perhaps to or above 6.0% on 30 year mortgages by the end of this year.  If one borrows $150,000 for 30 years now, the difference in a monthly payment of 5% versus 6% is about $95.  Another thing, if you waited to buy later, and the rate jumped to 6% as a result, you would loose about $15,000 of mortgage qualifying power. 

So, why wait?  House prices are very affordable, interest rates have been at their lowest in almost 50 year, and the IRS will give you money to buy.  These ingredients yield the perfect recipe: home ownership!

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