Fed-funds futures indicate that the Fed may raise rates at least 25 basis points by year end and up by 75 basis points by next spring. If the rates do rise, that will push mortgage rates higher also. A quick check today on a conventional (loan amount under $417,000) 30-year fixed loan is available at a rate of 5.625% with 1.0% point. The APR is 5.726%. These rates do move quite a bit, from day to day, and the price last week was 5.2%.
First time home buyers can qualify for a Homebuyer Credit and that credit will expire by year end. Home prices are beginning to rise and many areas have already stabilized. If you are looking to buy a home, this may be the opportune time.
Real estate has always been seen as a hedge against rising inflation. With inflation expected to be rising in 2010 to 2012, this also points to a good reason to buy a home.