Current Mortgage Rates And First-Time Home Buyer Tax Credit Extension: Part 1

Part 1 | Part 2

The Federal Government is considering extending and expanding the current $8,000 first time home buyer tax credit. This is certainly great news for home buyers when the current  mortgage rates historically low.

Robert Gibbs, said the administration will soon make a recommendation to the President concerning extending and expanding the current tax credit.  It is rumored one of the proposals being debated would increase the amount of the tax credit to $15,000 and eliminating the income limits. I am hopeful that they may also consider extending the credit to everyone regardless of whether they are a 1st time home buyer or not.  But, this is just my opinion from how I see the housing market.

Higher priced homes not attainable to most first time home buyers

This tax credit has been very influential in recharging the economy, stabilizing housing prices, helping to alleviate some of the foreclosed properties on the market since the foreclosed homes contribute to real estate prices declining.  What I have read is although the current 8k tax credit has been an incredible stimulus to the housing market. it has mainly affected lower priced homes less than 200k.  There are a lot of higher priced homes which are being foreclosed on and need some type of help to get buyers to start purchasing them.  The stabilization of the higher priced properties are essential to the economic recovery and may not be a feasible option for 1st time home buyers.

Current Mortgage Interest Rates Remain At Historic Lows

If you were not paying attention yesterday, current mortgage rates were treading lower throughout most of the day.  Freddie Mac released the average 30  year fixed mortgage interest rate was @ 5.04 for the week before.

As we all know, current mortgage interest rates are at historic lows.  While no one has a crystal ball and can predict which direction current mortgage interest rates will go in the near future, they have been slowly, steadily treading lower over the last couple of months

Also it has been reported home prices are at their most affordable levels in a few years. While home prices have been declining (which is great news for home buyers) it was just reported that home values have increased 2% for the second quarter, which is great news for everyone. Add in the tax credit you have an unbelievable opportunity if you are a first time home buyer.

Continue to Part 2: Current Mortgage Rates And First-Time Home Buyer Tax Credit Extension: Part 2