When shopping for a home, the natural tendency of any buyer is to want to pay the lowest price possible. It’s important to keep in mind, however, that the sales price is not the only factor that determines what the monthly payment will be. In fact, the impact of higher interest rates can easily nullify any benefit of waiting for a lower price.

Why Should I Rush to Buy?
While you may have heard discussions in the media about the decline of property values in many markets, the rate of decline appears to be stabilizing.

That being said, it would not be unreasonable for buyers to want to hold out for an additional decline of 10%, hoping to capture the best possible price. However, as property values have declined in many areas to 2003 levels or lower, waiting longer to pull the trigger could be a mistake. Many markets are reporting that lower property values have been bringing out investors and the result has been multiple offers on many properties. Properties priced correctly are not declining and, in fact, are creating a lot of interest.

Interest Rate Complacency
The problem is that many home buyers have been lulled into a sense of complacency because of extremely low interest rates. Since the Federal Reserve initiated its program of buying mortgage-backed securities, which control the rates people pay for their home loans, rates had been range bound, bouncing between 4.50% to 5.00% for a 30-year fixed-rate loan.

But buyers shouldn’t be confused by this. These rates are artificially low! Historically, interest rates have been above 6.00%. And any rate obtained below this number is a great deal, especially on homes with price tags from 2003!

Markets are Unforgiving
The last two weeks of May showed just how unforgiving the markets can be for people who choose to procrastinate. In just five days, interest rates from many lenders increased anywhere from .50% to 1.00% as fixed-income investors demanded more for their money.

For anyone who is waiting for prices to drop even more, a 1.00% increase in interest rate would bring a higher monthly principal and interest payment on a home, even if the price of that same home had fallen an additional 10% in value.

If you  are waiting for prices to fall even lower, be aware that while holding out for a lower price may help them win the battle, you could lose the war in terms of monthly payments and overall affordability. With the Federal Reserve scheduled to end its buying of mortgage-backed securities this year, rates only stand to go higher for those that wait. In fact, interest rates are already on the rise and could go higher from here.

$8000 Tax Credit
If you are planning to purchase your  first home this year, you will need to take possession before 12/01/2009 to be eligible for a tax credit of up to $8,000. In a survey conducted in March by Move.com, nearly 50% of home buyers are currently unaware that this free money exists in the marketplace. And since over 50% of all buyers are first-timers in today’s market, this could impact a lot of potential homebuyers.

Wilmington NC Real Estate

First time home buyers in Wilmington NC have a nice choice of homes for sale that are priced to sell quickly. Affordable neighborhoods in Wilmington, NC such as Whitney Pines, Alamosa Place and Jacobs Ridge are among the most popular. These neighborhoods are conveniently located near Wrightsville Beach and Mayfaire.

If you are searching for Wilmington, NC real estate, no matter what price range, just log on to my website at www.cbbaker.com for complete details on all homes for sale in Wilmington, NC. You can search by map, price range, neighborhood, schools and more.

There are numerous affordable neighborhoods in Wilmington, NC and New Hanover County that are peachy perfect for first time home buyers that would like to take advantage of the $7500 tax credit. They range in price from just under $150,000 to $200,000. Just to mention a few that you might want to take a look at: Whitney Pines, Alamosa  Place, Farrington Farms, Hollyfield at West Bay Estates. You can search all of these by neighborhood at www.cbbaker.com.

First Time Home Buyers Tax Credit

First time home buyers can now receive a $7500 tax credit on homes purchased on or after April 9, 2008 and before July 1, 2009. A tax credit is a direct reduction of taxes, dollar for dollar on your tax return which is different than a tax deduction. This is truly an opportunity of a lifetime, with home prices so affordable, interest rates low and a tax credit!

A first time home buyer must not have owned a residence anytime during the past 3 years. There are also income limitations involved, $75,000 for single homeowners and $150,000 for married couples. Also, homebuyers must qualify for the loan under normal income and credit qualifying tests.

So, now is truly the time to buy a home. Home prices are low, interest rates are low, and your home choices are limitless. Search for your dream now!