The Federal Reserve held the line on Tuesday–leaving the Fed Funds Rate at 2.00% for the third straight meeting. The decision, however, was anything but cut-and-dry.
Earlier in the week, the Personal Consumption Expenditure data indicated that inflation climbed 0.8% overall in June, which is the highest inflation jump in 27 years. In addition, the report indicated that inflation now sits at 2.3%–above the Fed’s desired range of 1-2%.
Although the Fed ultimately left interest rates unchanged, inflation obviously remains a concern and the recent rise may lead to an interest rate hike by the Fed in the near future.
What Does This Mean to You?
Many experts believe the housing market is nearing the bottom and may even be set to bounce back up. For now, home prices remain low, personal incomes are high, and interest rates are still very attractive.
If you’ve been weighing your options and waiting to see how things shake out, this is the ideal time to act–especially when you consider the new Housing and Economic Recovery Act benefits for home buyers:
Tax credits.First-time home buyers who purchase their primary residence between April 9, 2008 and July 1, 2009 are eligible for up to $7,500 in tax credit, as long as they haven’t owned a home in the last three years. The credit is actually a generous interest-free loan, so we’ll have to talk about some income parameters and payback terms. But if you’re a new home buyer – or know someone who is renting or in the market to buy – this is a huge benefit that we should discuss.
Lower rates for larger loans.
In the past, mortgages of $417,000 or more have been considered “jumbo” loans that were more expensive to finance. Thanks to recent provisions, however, those jumbo loans were able to qualify for better financing rates in some parts of the country. Although those provisions were set to expire, they are being extended–with a minor change to the maximum amount eligible. This is great news that may save you a ton of cash, so call me to find out how this impacts our area, and if it could help you.
Down Payment Assistance…going, going, not gone yet.
Another provision of the legislation eliminates some down payment assistance programs later this year…but they are still available right now, and depending on your circumstances, we may be able to take advantage of them to double your benefit as a home buyer.
Call today to discuss your situation and set up a time to talk.
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Copyright-Jason Mitchell- *Consumers have all the tools, time to buy a home* Blogs Categories Posts By Date Thursday, July 31, 2008 Scottsdale Marketby Jason Mitchell on Thu, Jul, 31, 2008 12:43 PM Categories: , Homes, Real Estate, Scottsdale
What once was, no longer is. 500 to 800 sqft does not exsist any more in Scottsdale. 200 to 400 IS NOW THE PERFECT STORM TO BUY A HOME???
We have all seen the front page news, including such headlines as the USA Today this past Wednesday stating that the ” Housing Market gets uglier and uglier” ! So, you ask me, “why on should take the plunge into turbulent waters and finally buy.
Here are 4 crucial home buying reasons to consider:
1) Fannie Mae has significantly eased their lending guidelines: Please read Fannie Mae’s News Release replacing policy for markets where home prices are declining.
Peter Toner of the San Diego Real Estate wrote Fannie Mae Down Payment Requirements Fall to minimum of 3-5% correctly pointing out that Fannie Mae is hoping to stimulate buying as well as well as stave off a negative astigmatism on local housing.
This easing of credit, effort to stimulate the Real Estate market along with the inference of reduced risk to a company whose priority is to make money for its shareholders is a good sign.
2) Interest Rates are rising to the highest levels in three months on Tuesday’s Treasury department auction. The same house that may have declined in price, actually, may have just got more expensive.
3) Negotiation is on the buyers side - the glut and over Supply of homes is a major hurdle. In fact, I know many sellers who have no showings , less any offers in the last 6 months. If you present a competitive offer most sellers will be very ready, eager and willing to negotiate price, time frames and incentives to get a deal done.
My crystal ball is not 100% effective and I am not saying this is the absolute bottom.
However, with low interest rates, the easing of credit to get a loan, the ability to choose from the over abundance of supply, the ability to negotiate and this significant drop in prices may afford you the opportunity for which you have waited.
Consider why you are buying your next home. If it is a place to live, use , make your home and raise a family, a tax incentive, and a long-term appreciating asset (notice - I said long-term) , today may be an excellent opportunity to buy. |
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