Lower Rates, Incentives Benefit Homebuyers

Lower rates and incentives for first-time buyers may get homebuyers off the fence. Just in time, too, because home prices could be starting to level off. In June, prices dropped the least they had since July 2007. In fact, the decline in home prices has been slowing since January 2008, according to the S&P/Case-Shiller 20-city home price composite index.

What's more, there were 4.67 million existing homes ready for sale in July, according to the NAR. That's an 11.2-month supply at the current rate of sales. Although the number of homes ready for sale is up 3.9% from June, the increase largely reflects a steep increase in the number of condominiums on the market. The number of single-family homes on the market dipped slightly.

Many analysts, including those at NAR, believe that things should look better in 2009. While that's good for the overall economy, it might make things slightly worse for homebuyers as it becomes less of a buyer's market. If the analysts are right, those searching for homes have a handful of months to find the home of their dreams and receive the best deal possible.

Keep in mind, though, that the rising rate of foreclosures may give buyers the advantage even longer. Rising foreclosures mean more properties on the market.

Whether a buyer is looking at new construction, existing homes or foreclosure properties, it's important to have an idea of what kind of financing he or she can line up before deciding on a house. And it's a good idea to shop around to find the best financing options. The latest mortgage rates and terms can be found at the mortgage section of the BankingMyWay.com Web site. Once there, a search by ZIP code can help a buyer find local lenders.