The new year has been off to an interesting start.  Typically, January is a little slow, due to the cold weather and post-holiday stress.  What I am seeing this year, is more activity due to impending dates, that are really just around the corner.  I have already had 2 listing appointments this year, and my open house traffic has been averaging around 7 guests, which again, for January, is considered busy.

What’s the rush?

First, interest rates are on everybody’s mind, and everyone wants to know when they are going up.  The Federal Reserve Bank is supposed to stop purchasing mortgage-backed securities issued by Fannie Mae and Freddy Mac.  The program is set to end in March of 2010, and when it does, interest rates are likely to increase and rather quickly.  

Another reason for the early activity in 2010, is that the tax credit deadlines for first-time home buyers and move-up buyers are steadily approaching.  You have to be under contract by April 30, 2010 to qualify.  So, if you need to sell a home, in order to purchase, it should be listed now.  As a first time home buyer, you will have more of a selection and less stress, if we start looking now.  First time home buyers who wait until April are going to feel pressure to make a hasty choice. Remember, a home is the most expensive item you will ever purchase, so let it be an educated decision.

Lastly, FHA changes are coming!  The Upfront Mortgage Insurance Premium (UFMIP) will be increasing from 1.75% to 2.25% later this Spring. In addition, allowable seller contributions will decrease from 6% to 3% come Summer 2010. This means first time home buyers will need to have more money saved in order to purchase a home.