Lawrence Yun, economist for the National Association of Realtors, predicted Friday that home prices would begin rising next year for the first time in 4 years, as reported in the San Diego Union-Tribune. He based his prediction, given before the annual convention of the NAR in San Diego, on low interest rates, low prices causing improved affordability, and the federal $8000 tax credit for first-time home buyers recently renewed by Congress. Forty percent of the buyers who used the credit were influenced to buy because of the credit.

Yun feels there is pent up demand of first-time buyers for homes, both new and resale. While prices should rise, it is also likely that mortgage interest rates will also rise slightly to around 5.7% from the current 5.2%.

Other experts, such as Patrick Nugent of IHS Global Insight, Michael Lea of the real estate center at SDSU, and James Hamilton at UCSD, are not as sure that prices will recover next year, although there is a consensus that we are near the bottom.

This is an excellent time to consider buying, with low interest rates, low prices likely to rise in the future, and the federal first-time home buyer tax  credit.

This entry was posted on Sunday, November 15th, 2009 at 7:31 pm and is filed under Buyers, First-Time Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.