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When should I buy?

Dani Grigg

Dani Grigg

When my husband and I started to consider the possibility of buying our first home last September, we consulted a mortgage banker. The advice we received was: “Hurry! Buy now! The tax credit will not be extended and interest rates are going up!”

Well, we didn’t buy then. Fast forward six months to today, and here’s the situation: The tax credit is still there, interest rates are the same as they were in September, and with no sign of a slowdown in foreclosures or a boost in the job market, prices should still be low for many months to come.

Let’s add another factor to the equation. Once again, we’re staring the expiration of the first-time homebuyer tax credit in the face.

There’s no consensus out there about the effects of that expiration, but there’s the chance that competition will decrease for starter houses at that point, and prices could follow suit. In fact, various national experts are predicting a price drop of about 10 percent in 2010.

That leads to a question some buyers are asking themselves: Should I buy now and get $8,000 for free, or should I wait for the tax credit to expire and hope prices fall enough to make up for it and then some?

But then again, there’s no guarantee that interest rates will maintain their phenomenally low levels for much longer.

So here’s my answer to the conundrum: Any time I buy a house this year will be a great time to buy. If I can’t find a house that I love and can afford by April 30, that’s O.K. The steals will still be here for a while.



About Dani Grigg