December Update

December Update:
According to a report by the National Association of REALTORS (NAR), Existing homes sales are up over 23 percent from the same time a year ago, and are on pace to reach 6.1 million units by year's end. Current inventory levels in all price ranges have dropped to 3.57 million units nationally, creating a 7-month supply. Much of the recent activity was sparked by first time buyers scrambling to take advantage of an $8,000 tax credit, which was initially due to expire at the end of November. NAR expects market demand to remain strong as the tax credit program has been extended and expanded through April 30.

Freddie Mac is reporting that the average commitment rate for a 30-year, conventional fixed rate loan has dropped below the 5 percent threshold in October, enabling home buyers and facilitating market activity across the country. With interest rates expected to increase next year, buyers have a terrific opportunity to secure a long term loan at historically low rates.

Finance Q and A:
Q: How does the Extended Home Buyers Tax Credit benefit buyers today?
A: The newer Extended Home Buyers Tax Credit offers buyers a great opportunity to stretch their purchase power by reducing their federal tax liability when they purchase a home. A tax credit worth up to $8,000 is available to qualifying first time buyers who enter into a contract to purchase a home between now and the end of April 2010.

The tax credit isn't only for first time buyers, as move-up homeowners can also earn a tax credit of $6,500 when they sell their home to buy another, as long as they have lived in the home they are selling for five of the past eight years. There are a few qualifying guidelines to consider. Contact your mortgage professional today to see how the Extended Home Buyers Tax Credit affects you!

Tip of the Month:
When figuring out what you can afford, it is important to factor in the additional costs of home ownership, beyond the mortgage principle and interest. Be sure to budget for hazard insurance, association dues, property taxes, as well as monthly utilities and other expenses unique to the property. Ask your mortgage professional to help you budget today to get the most out of your next purchase!