I have been working with a lot of first time home buyers lately. One thing a lot of them ask me, is now a good time for a first time home buyer to make the jump and buy a home? In real estate when you ask a questions the most common answer is maybe or it depends. This is one where the maybe takes a back seat. If you are considering making your first purchase of a home and you have a good steady income now is a great time to make that jump.
And a first time home buyer is not just someone who has never purchased a home before. If you relocated to Arizona from out of state and have been renting for the last three years you are also considered a first time home buyer. One reason now is a great time for you to buy is a large tax credit that is set to expire on December 1st of 2009. If you have not owned a home in the last three years, and you buy and close on a home before December 1st you will be eligible for a $8,000 federal tax credit next year. This means you will be exempt from paying up to the first $8,000 in federal income taxes this year.
The tax credit is not the only reason it is a good time for a first time home buyer to get into a house. If you look at home prices in Arizona right now it is hard to imagine you will ever be able to get deals like this again in the future. Many markets have have dropped as much as 50% in value and you can now buy houses in some areas for less than the homes could be built for. Interest rates are also at an amazing level too for home buyers. You can get an FHA loan today around 5.00%. Will prices go lower? Maybe, but how much lower is just a guess by anyone. Will interest rates go lower? Maybe, but they are at historical lows right now. When you combine the two, current home prices and current interest rates it is hard to imagine there will be many better times to buy than now.
While I would not recommend you purchase a home if you cannot afford it, there are still ways to get into homes with little money down. If a home qualifies for a federal USDA loan, you can still get into a home with close to no money down. Combine all these things and what you get is a great housing market, if you are a home buyer.
