I’ve said it before and I’ll say it again: now may be a great time to buy a house in Phoenix. Have home prices stopped falling, for good?  Will they rise again soon?  I can’t answer those questions, but I can offer two great reasons to buy now:

Reason #1: The First-time Home Buyer’s Tax Credit Is Set to Expire on December 1

Congress is debating an extension of the first-time homebuyer’s tax credit, but as the law stands now, it’s set to expire on December 1.  Part of the Housing and Economic Recovery Act of 2008, the tax credit gives up to $8,000 (10% of the home’s purchase price) for homebuyers who qualify. 

You qualify if:

You purchase a principal residence (not vacation home or investment property) between April 8, 2008, and before Dec. 1, 2009.

You (and your spouse, if married) have not owned a home in the three years prior to a purchase.

Your income is less than $170,000 (for married couples filing joint tax returns) or $95,000 (for single filers).

You are disqualified if:

You sell your home before the end of the year.

You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.

You are a nonresident alien.

For more details about the tax credit, check out the IRS website.

The hitch, of course, is that you must close escrow on your home before December 1.  And while that may seem far away (we’re not even counting “Shopping Days ‘Til Christmas” yet!) remember that the mortgage financing and home buying process can take a while.

“In the past, home buyers could usually close on the deal within 45 days after signing a contract to buy, says Lawrence Yun, chief economist for the National Association of Realtors. But these days, buyers should give themselves at least 60 days, he says.  You'll need to give yourself even more time if you're interested in buying a home that's in foreclosure or is a "real estate owned" property (REO) — a home the bank repossessed after failing to sell it at a foreclosure auction. "The window of opportunity is closing fast unless the tax credit is extended," Yun says.”

Reason #2: Mortgage Interest Rates Remain Near Historic Lows

According to the Associated Press, “The average rate for a 30-year fixed mortgage was 5.07 percent this week, down from 5.08 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.”

But they may not be low (this low, at least) for much longer.  “Rates should stay low for another month or two as government efforts to keep them low remain effective, predicts Michael Larson, an interest rate and real estate analyst with Weiss Research. . . But it won't last forever. Rates will eventually trend upward, Larson said, as the economy starts to turn around. . .”

What do you think?  Are you planning to buy a home soon?  Click on the “Comments” link below and join the discussion!