Annapolis, MD – Mortgage rates are low with fixed rates well below 5%, however the clock is ticking on rates. The government has been buying mortgage bonds to artificially keep rates low to stimulate real estate sales. Reports say that they will stop buying bonds after March 2010 and this may cause rates to rise to the 6%+ range. Higher rates affect buying power, lowering the amount a buyer can afford to buy.
Keep in mind also that there is also a deadline on the 1st-time home buyer credit of $8,000. The tax credit applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
Prospective home buyers would be well advised to take these possible developments into consideration when making their home buying plans.