Green Mortgage Northwest

There is plenty of talk about the first time home buyer credit and whether it will be continued, expanded or cut off. One of the options out there is the (creatively named) Home Ownership Moves the Economy(HOME) Act of 2009.  HR 2801 was introduced by Howard Coble (R-NC).

This bill would continue the current tax credit for first time home buyer currently set to expire December 1, 2009. However, there will be a couple changes:

1. No more income restrictions
2. Buyers do not need to be first time buyers

For buyers who couldn’t qualify for the tax credit because of income or having already owned a house, this is a huge difference. Get ready for an even larger chunk of the population to enter the home buying fray if this bill passes.

With more disposable income, home ownership experience and potential equity in their current property, there will be an increase in buyers AND sellers. So if HR 2801 passes, get ready!

Has housing finally bottomed? After 3 years of terribly negative data, 19 of the 20 markets tracked by Case-Shiller improved last month. That’s 5 months in a row of good data and the best showing in over 3 years!

Case-Shiller is not perfect, however. It’s limited to 20 U.S. cities, which encompasses just 9% of the U.S. population. Also:

1. It is on a 2-month lag, so it indicates how housing was, not how it currently is.
2. It ignores locality, grouping city neighborhoods into one big lump. Considering how badly outlying areas are hurting compared to close-in properties (especially in Portland), this is a big deal.

It still is a good indicator of an improving economy. When housing cracks first started formed in 2005 and 2006, Wall Street continued at a torrid pace while Case-Shiller called for a collapse. Turns out, both sides were wrong, but Case-Shiller earned a ton of respect for its (overly doomsday) call.

These days, the Case-Shiller Index is the go-to barometer for home values nationwide.

Getting back to June data, because Case-Shiller says home prices are “on an upswing,” we can assume it means good things for the housing market, in general.

This isn’t all good news. For a first time home buyer facing higher prices and the expiration of the $8,000 tax credit, this means increased competition for properties.

If you’re on the fence about buying a home or wondering if the time is right, according to Case-Shiller, the “right time” may have been a couple months ago. With prices on the upswing, homes may only get more expensive.

If you have any questions or would like to get pre-approved for a loan, send me an email or give me a call!