With uncertainty still lingering in the current economy, many potential home buyers are sitting on the fence. Inventory and selection are good, home prices remain flat and sellers are more motivated to work with buyers on price. Interest rates are great, but may inch up later this year. This factor may create some urgency to buy now.
New and pending regulations in response to the mortgage crisis mean new loans and refinancing will be more complicated, more time consuming and more costly. We are seeing higher fees, higher mortgage insurance premiums and bigger down payments. Some real estate analysts see movement toward a minimum of 10 percent down payment.
Government intervention in the mortgage market will likely be scaled back. During the lending crisis the federal government guaranteed nine out of ten mortgages. Loans made by made by government controlled lenders, Fannie Mae and Freddie Mac will be reduced as future lending moves back to the private sector. FHA loans will be strengthened, albeit with higher fees, but won't take over the void left by Fannie Mae and Freddie Mac.
Whether you are a first time buyer, looking to move up or hoping to downsize, now might be the most beneficial time to make that decision.