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What Does the Future Hold for Mortgages & Interest Rates?

Don't shelve plans to buy or sell a home in the next year, nor should you fear that markets will make it a bad decision to wait.  If your plans are to buy or sell in the next 2 to 5 years, it's not a good idea to accelerate it just because you may fear where interest rates will be.

The government has been rolling out plan after plan to revive the housing markets and reduce foreclosure inventories.  Even though it's increasing debt and future taxes, the housing market is too important to our economy to allow it to continue in the performance of the last 3 years.  Expect government efforts to continue until the markets have clearly exited their current risky state.

While it's unlikely that interest rates will remain at their current historically rock-bottom numbers, yet there will be similar efforts to keep them at levels likely to help the largest number of home buyers possible.  They can climb at least a couple of points and still validate the argument that they're low based on a 20+ year market history.

If you're a seller anticipating putting your home on the market in the next 2 to 5 years, this current glut of foreclosures should be over, with a shrinking of inventory.  The cutback in building will at some point result in a shift toward an imbalance on the demand side.  That should return some appreciation and help in your selling efforts.

If you're a buyer, now is a great time if you can get a mortgage and have a decent down payment.  But, if you are planning on a purchase a couple or more years in the future, you should still be able to get a great home with an interest rate that makes it affordable.

Some positive news in the right direction:  The GLVAR (Greater Las Vegas Association of Realtors) released the figures for August Home Sales Report which show a 3.7% increase in home prices from the previous month in July 2010.  Those homes in Las Vegas that were purchased with cash accounted for 45.9%.

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