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The Right Time for Homebuyers
By Elizabeth Kollar,
Senior Vice President
Fifth Third Bank (Northwestern Ohio)
Guest Column
Current mortgage rates, tax credits and home prices can
create the perfect buying opportunity.
While 2009 was a difficult economic year, it has created a
great opportunity for those hoping to buy a home. With
mortgage rates near all-time lows and home prices at 2004
levels, many potential homebuyers have many options as they
enter the housing market. Add in the government-provided tax
credits for first-time and now repeat homebuyers – and this
could be the right time to become a homeowner.
Many have taken advantage of the up to $8,000 first-time
homebuyer tax credit. When that tax credit was extended in
November, the government also announced an additional tax
credit for up to $6,500 for current homeowners who have
owned their home for five consecutive years and are buying a
new principal residence.
People with higher incomes may now qualify for the credits,
as income limits have increased to $125,000 for individuals
and $225,000 for married couples. Both first time and repeat
homebuyers must enter a binding contract by April 30, 2010
and close by June 30, 2010.
Most economists say there is a high likelihood the
government incentives for first-time and current homebuyers
looking to upgrade will not be renewed after the April 30,
2010 expiration date. It is expected that when the economy
begins to recover, the Fed will reduce or not renew its
investment of mortgage-backed securities to prevent
inflation.
This combination of low rates, low housing prices and
government incentives at this rate might not happen again
for some time. Depending on your credit history, down
payment and other factors, your monthly mortgage payment
could be less than monthly rental fees for an apartment.
Many buyers have already taken advantage of this right time
for homebuyers. According to the National Association of
Realtors (NAR), first-time homebuyers purchased 43 percent
of homes in December.
Repeat buyers rose to 42 percent of transactions in December
from 37 percent in November as the tax credit for repeat
homebuyers was announced.
While it may be the perfect time to enter the housing
market, contact a mortgage loan
originator who will be able to review your options and
provide you with all available options to decide. For
more details about the government tax credits and
eligibility requirements, visit
www.irs.gov or contact your tax consultant. |
