2009 was one of the best summers for home-buyers to purchase a new home since the 1960’s. Interest rates were at record lows, home prices were depressed, and there was an $8,000 tax credit from the federal government to buy a home. Because of actions by the Federal Reserve and Congress, 2010 will continue to be an excellent year to purchase a home.
The Federal Reserve has announced that it intends to scale back its artificial support of the home mortgage market, meaning that mortgage interest rates will soon begin to increase meaning that fewer people will be buying homes and lowering prices.
According to Dow Jones, there are also now almost 3 million homeowners that are 90 days delinquent are more and have not yet been foreclosed upon. Eventually, the axe will fall on these homes and they will flood the market with foreclosures.
The first-time homebuyer’s tax credit is also set to expire later this year, meaning that there will be far fewer first-time home buyers on the market. Realtors have been pushing to extend this tax credit, but so far Congress hasn’t taken any action to do so.
Consumers looking to purchase a home as an investment, their primary resident, or as a vacation home will have a lot of opportunity in 2010 to get a deal. Most real estate analysts don’t predict that prices will get much lower than they are now, but real estate won’t be appreciating at the values of 6% or higher in some market for some years to come.