It is obvious that in order to buy a house now a days, most will require to obtain a loan. Right now, most loans(money) that is available is ultimately supplied by the government. When a bank makes a loan, it is common for them to turn around and sell the loan to companies like Fannie Mae, Freddie Mac, etc, which are basically government companies. Right now, both Fannie and Freddie are broke, requiring to get billions from the US gov. to stay afloat. Also, some banks sell their loans as mortgage backed securities, (groups of loans) which the Fed is buying up and has been for about a year.... which helps keep interest rates low. As of March 31, 2010, the Fed will stop buying these securities.. therefore, it will make it even harder to get a loan, and also resulting in an increase in interest rates. That will put more downward pressure for the housing market. Interest rates will probably start rising sometime in June, since it takes a while for the process to go through. Less money will be available to loan, thus, those with money will ask for a higher interest rate.. once the government stops buying MBS. This year is really a risky time to buy... in my small brain opinion, prices will remain flat, or go down more... so, no need to rush... get your things in order to buy.
1. Improve FICO score, above 700.
2. Pay off all debt.
3. Save up to 20% for down payment.
Happy hunting.
