The weather forecast I saw last Sunday morning showed clouds giving way to a sunny afternoon in the low 50s. I wondered how the meteorologists could be so wrong by 20 degrees. And it made me think of real estate.
You frequently hear economists and financial experts predict with some measure of confidence what will happen to mortgage rates, housing prices, and home sales. They often hit the mark. Sometimes, though, like with the weather, unpredictable factors render a forecast as helpful as a good old stab in the dark…
Interest rates are about as low as they’ve ever been. That translates into a larger loan for the same monthly payment compared to times with higher rates.
In addition to favorable mortgage rates, the federal government will pay you thousands of dollars to buy a home. Most first-time buyers and many current homeowners qualify for a significant tax credit. To take advantage of the credit, you must have a signed contract by April 30 and close on the transaction by June 30. There’s a real incentive for meeting these deadlines. The tax credit is worth up to $8,000 for first timers and $6,500 for existing homeowners.
You may be wondering whether the tax-credit will be extended. After all, the deadline has been pushed later once already. You may also want to know if interest rates could go down a little more. I can tell you what most experts I’ve heard say to these questions: probably not. But as I pointed out, the forecasters aren’t always right. Rather than focus on predictions, I recommend you take a peak outside right now. Conditions for purchasing a home before the tax credit expires look positively sunny.
For the full "Forget the Forecast; Look Out the Window" story…
By MARTY KRAMER, Consumer columnist
FEB. 12, 2010
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