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Right Time for First-Time Buyers

Carrie

14 January 2009

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While most potential buyers are feeling pessimistic about the housing market because of hard economical times, you could be taking advantage of this buying opportunity of a lifetime!

Why should 2009 be considered the Golden Age for first-time home buyers?

Finances for Buyers

Rates on 30-year mortgages dropped to a level of almost 5.5 percent in December 2008. In just one week, the rate plunged at an alarming speed, making it the biggest drop in 27 years! Look forward to the future: Mortgage rates will continue to decrease if the government buys mortgage-backed securities issued by Fannie Mae and Freddie Mac. It will then be able to introduce an industry-backed plan to lower the rate to an astonishing 4.5 percent. Finally, if a new home is purchased by July 1, 2009, eligible first-time buyers will be able to take advantage of a $7500 federal tax credit that works like an interest-free loan!

Strategies for Sellers

If you are a seller, be sure to highlight the value of home ownership when pitching your house to a first-time buyer. Many first-time buyers will be very excited that they can finally make their own decisions regarding the design of their dwelling. Without consulting a landlord, new homeowners will be able to plant a garden, paint with bright colors, hang decorative pieces of art and more! Some of them will also enjoy the convenience of using amenities they did not have access to while renting an apartment or a townhome. These may include installing a swimming pool, buying a hot tub, owning a washer and dryer or parking a vehicle in a spacious garage!

Improving the Economy

When it comes to the housing market as a whole, everyone should root for the first-time buyers. As more of them purchase properties, this frees up the current homeowners to move on and buy other homes, thereby furthering more sales. And even if a veteran homeowner must sell his/her property to a new homeowner for less than the original asking price, chances are that most other sellers out there must do the same thing. And as more properties are being bought and sold, the market will eventually take a turn for the better. In anywhere from five to 10 years, you may be able to sell your once-new home for even more than the price at which it was originally purchased. This then starts of the cycle of buying and selling all over again!

While mortgage rates continue to decrease, and while you have the power of negotiation on your side, this is the prime time to buy your first home!