$7,500 Home Buyers Credit

Starting this week, hundreds of thousands of potential buyers who've been on the sidelines can purchase a new or resale house and qualify for the credit. The National Association of Realtors estimates that up to two million sales could be stimulated by the credit in the coming 11 months, and the National Association of Home Builders anticipates a "multiplier effect" in the move-up segment of the market.

That's because people who sell houses to buyers using the credit will then often need to go out and find replacement homes for themselves -- effectively rippling the impact of the credit upstream, triggering even more sales.

Since there's no Congressional limit on how many buyers can take advantage of the new incentive, it could prove to be huge. It all depends on whether Realtors, builders and individual sellers educate potential buyers about how to factor the credit into affording a new home.

In other economic news this week, mortgage rates jumped to their highest level in nearly a year, 6.6 percent for 30-year fixed rate conventional loans, according to the Mortgage Bankers Association of America.

On the plus side, the University of Michigan's Consumer Sentiment survey -- a key economic barometer affecting consumers' willingness to spend - rose a surprising five points last month.

And still another surprise: The national home ownership rate -- defying all gloom and doom predictions -- jumped to 68.1 percent in the latest quarter, up from 67.8 percent.

Buying Or Selling Your Home Is Affected By Rates?

Buying or selling your home is affected by rates and property values.
Sellers can seat waiting for prices to go up, this will only turn into a high purchase price, possible high interest rates and a high property taxe when replacing and existing a home.

Buyers could wait just to see property values and rates increasing.
There are some areas where we have seen stable prices and in some others prices steel going down. However, the move will be swift day to day.

For buyers it is important to capture the best rate available in advance. Increase rates decrees your buying power.

It's simple: The trend is higher. Rates will have their ups and downs, but rates are headed higher in the medium term. Lenders and Fannie and Freddie are jacking up rates and fees to compensate for risk.
Whatever happened to rates yesterday, the opposite will happen the next day. This will lead to very slight changes, in either direction, until the market continues to settle down.

The rates direction has meaningful impact, but focus remains on borrower qualification, raising concerns that, regardless of the rate environment, there may be a further increase in borrowers who are unable to qualify.

Qualifying for a loan today might not be as easy tomorrow with the changing values, changing rates and changing qualifications

Just as there is no obvious explanation for the drop in oil prices, mortgage rates are going to drop like a rock. That is and expectation and you can not bank on that.

By Oscar Matamoros/Marketing
Re/Max Metro Realty
http://www.homesbyarea.com/