The saying “the stars are aligned” pretty much sums up the housing market today. Let’s take a look at why buying today — not waiting until Spring, for example — makes sense.

The Department of Housing and Urban Development (HUD) recently made changes to the cost of getting a loan guaranteed by the Federal Housing Authority (FHA). On April 5th, 2010, the cost of required up-front mortgage insurance on FHA insured loans will be increased by one-half per cent. This could add $1,000 or more to the loan amount. Although it is usually financed in the loan, the extra cost will be paid by the homebuyer one way or the other.

There are also changes coming to the amount a home seller can contribute toward the buyer’s costs at closing. Currently, FHA allows the seller to contribute up to 6% of the home’s price. That will be cut in half to just 3%, probably sometime this Summer (the date has not yet been set by HUD). This could mean many thousands of dollars more that the homebuyer will have to come up with at closing.

Mortgage rates are near historic lows, BUT the Federal Reserve Board’s mortgage backed securities purchase program is set to expire. The Fed has already scaled back its purchases over the last few months, allowing rates to rise on mortgages. Once the Fed stops the purchases entirely at the end of the first quarter, rates are expected to rise a half per cent or more.

The deadline for the Home Buyer Tax Credit is for contracts written on or before April 30th (and set to close no later than June 30th).

All of this adds up to a big “don’t wait!” If you or anyone you know is thinking about buying a home, please have them call or email us today.