If you have been holding off on a real estate purchase, signs of a turnaround in the housing market may have you wondering if it is finally time to make your move. While home prices remain low, they are no longer free-falling in most markets (definitely not in the local Philadelphia area). Mortgage rates are at historical lows. And, the tax credit offered to new buyers last year has been extended until April 30th and expanded to include current homeowners.
Despite all the motivation to buy right now, it is still a difficult market. It may take longer than expected to sell your current home, if you have one, and you may walk away with less cash than expected. Prices could still far further is some markets outside our local area. Regardless, it is still a good time to buy.
If you do decide to wait, not only will you risk losing the chance to cash in on the tax credit, but you may also risk a jump in mortgage rates. The latter could be devastating. If the Fed moves ahead with its plan to stop buying mortgage-backed securities at the end of March, the rate on a 30-year fixed mortgage is expected to increase nearly one percentage point according to Money Magazine.
In my opinion, now is the best time to buy in the Philadelphia area and we will see the market turnaround in the second half on 2010. More importantly, rates will go up, which will increase monthly payments. All of these anticipated movements in the market will have one end result: costing Buyers more money at the time of purchase, and each month of ownership moving forward.