Monday, December 8, 2008

Golden Age For First Time Home Buyers

Photo by PatchworkPottery on Flickr.

The housing market today is a very controversial topic in the media that people rarely take a moment to assess their own situations. Everyone's priority is different and although no one knows how to time the bottom, if you look over the past year bargains are definitely available, mortgage rates are at their all time lows and there are an abundance of tax benefits. There are still opportunities to buy new construction developments that are eligible for 421b tax abatement. Even if prices decrease further, if you are looking long term, I believe the next generation of wealth will be made in this market. The following NY Times article emphasizes the advantages first-time home buyers have if they choose to buy a home now. With constant talks about the federal government trying to drive down rates to 4.5% that is truly an incredible rate to lock into for the next 30 years. Also, income-eligible first-time home buyers won't want to miss the opportunity for a $7,500 federal tax credit, since the deadline is June 30th. Most people don't realize that first-time home buyers don't have the luxury of gambling on the market bottom. Once the market starts to turn around, existing home buyers who wanted to move years ago will quickly sell their current home to buy a step-up home.

We wouldn’t let another decline bother us, said Michael Proman. You can never time a bottom. This is a long-term investment for us (referring to their recent home purchase in Minneapolis), and it truly is the best investment we have in our portfolio right now.

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