Utah Real Estate & Mortgage Blog

Hello Zoom Members,

I have been scouring the proposals in the Legislature, trying to get guidance on what will transpire with the Tax Credit.  The Tax Credit must be the most influential measure in our housing crisis that has helped lift the market to at least water level, if not slightly peeking into the sky.  All Real Estate Professionals have been concerned about the eventual stimulus spigot abruptly being turned off.  It could have sent our housing market back under water and our home values with it.

This morning news of a plan emerged.  Surprisingly, there’s not a lot of print and direction from the Press.  Allow me to give you the facts and some suppositions that Legislators are mulling around.  Senators agreed to extend the tax credit for first time home buyers and to offer a reduced credit to some repeat buyers. $8K for 1st time buyers and up to $6500 to repeat buyers that have owned their home at least 5 years. Those are the facts.  The Legislature is considering, for 1st time buyers, to extend the $8K tax credit through March, 2010.  After March, the $8K will go down $2000 for each month until the end of June, when it will be over.

This is great news.  Our housing market in Utah was one of the last markets to feel the pinch on value depreciation, and it will likely be one of the last to recover fully.  Don’t get me wrong…we have bottomed out, in my opinion, we just need more time to emerge into a vibrant market which is able to support our Builders in erecting new homes, and eat up existing inventories to levels that promote growth.

If you are reading my Mortgage Market Update in our monthly newsletter, you are well informed about the fact that the Feds are now scaling back their purchase of Mortgage Backed Securities (MBS).  You have read that the impact of this will be a smoother transition to higher mortgage rates.  My recommendation to our Members is not to sit on the sidelines.  If you are considering a purchase in the next 1-5 years, I suggest you begin your purchase NOW.  We could very well be at 6% on a 30 year fixed mortgage by March and, I believe, we will go up from there.  Your interest rate is the single most influential factor on your monthly cash flow.

Please contact me if you want to hear strategies that I have been implementing for my clients.  These strategies are intended to minimize your interest rate and improve your cash flow for long term success in home ownership.  There are many factors that go in to my ultimate recommendation.

Success to you my friends,

Joel Ellowitz

(801) 949-4872

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