Is It A Good Time To Buy A Home?

If you can afford it, you bet! The home prices are still low and the mortgage rates are still at relatively low values.

The home market has picked up a bit in the last few months. However, most of the people bought a home to take advantage of the tax credits available this year. The ones who were desperate to buy a home finally ventured out as soon as they saw the home prices stabilizing.

The efforts to refinance the mortgage for the people under water had a small effect. Many people even after refinancing to a very low mortgage rate are defaulting on the mortgage payments again. This is because the job market is still pretty weak and the people still have no source of income. Refinancing to a lower mortgage rate helped them put off the imminent foreclosure of their home by a few months. Unless the jobs become available soon, the delinquencies on the home mortgage front would continue to rise.

Therefore, it is still time to buy a home at bargain prices. The banks have become more strict in lending but they are sitting on piles of cash that is only growing by the day and they would want to lend money to prospective home buyers who have even a decent credit history.

A friend of mine recently bought a condominium in less than $50,000 in the city of Chicago. This property in normal times would be easily priced at above $200,000!

Why are these properties being availae for so cheap?

The banks have finally figured out that it costs more to foreclose a home than to sell it off short. A short sale helps both the bank as well as the home owner in finally closing the chapter on the home and moving on even though both parties have to bear losses in the transaction. A short sale also does not carry the stigma of a foreclosure.

The new approach from the banks to allow short sales whenever possible is putting more houses on sale at very low prices. Unlike the foreclosed homes, the homes on short sale are not vandalized by the home owners before let their home sell off. You can therefore find homes in good condition at low prices.

If you have been waiting to get advantage the tax credits this year, you would need to buy a home before April 30. Since the home market is not picking up still, the administration is coming up with more tax incentives and help for the home owners under water.

Keep an eye on good deals and grab one or more. You can use the properties for your own living or as investments that you can cash on when the home market eventually picks up again.