The new Stimulus Bill Currently being debated in the senate may contain several items of significant benefit to the housing industry. Last night, the Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences. This would be a significant improvement over the current $7,500 tax credit that is limited only to first time home buyers, but which must be repaid over a 15 year period.
In addition, a proposal has also been made to provide 30 year fixed rate financing at a fixed rate of 4%.
Details on both of these proposals has been limited, and any amendments passed by the Senate would have to be reconciled with the House Approved Stimulus Bill.
I would not recommend that people who are interested in buying a home delay their closing in anticipation of getting a 4% mortgage. Les than a month ago, there was strong speculation that the government would put pressure on the markets to lower interest rates to 4.5% , but instead, interest rate levels bounced back above the 5% level for conventional mortgages.
One thing that concerns me is what will happen when the Federal Government runs out of money to continue buying FNMA and GNMA mortgage backed securities, which has been the primary funding source for conventional mortgages and which has kept mortgage interest rates low. If government funding of mortgages slows down, the private sector has not shown any inclination to begin buying mortgage backed securities anywhere near the level previously funded. In that case, interest rates may move quickly upwards due to a lack of available funds.
I believe that now may the best time in the near future to purchase a home due to the excellent pricing available and the historical lows in interest rates we currently enjoy.
For additional information about purchasing a home on the Palos Verdes Peninsula, visit my website at https://www.maureenmegowan.com
For more information about Palos Verdes and South Bay Real Estate and buying and sellinga homeon the Palos Verdes Peninsula, visit my website at https://www.maureenmegowan.com. I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula.I would love to hear your comments or suggestions.
