30-year Mortgage Rate Above 5%; Will First-Time Homebuyers Credit Extension Generate More Buyers?

30-year mortgage rates have risen to just above 5%, which is still a low amount, but over the past weeks new mortgage applications have been fewer in number. However, with the recent extension of the first-time homebuyer tax credit could there be new buyers coming into the housing market?

There was much debate over an extension for the first-time homebuyer tax credit and as the supposed cut-off date nears many would-be homebuyers disappeared, which seems to suggest that the first-time homebuyer tax credit played a pivotal role in the new life seen in the housing market. Since applications for new homes were becoming scarcer as the end date grew closer, it stands to reason that the new extension on first-time homebuyer tax credit should generate more buyers.

Mortgage rates on a 30-year home loan still remain low despite the rise and if buyers can lock in such a low mortgage rate and get money in return now seems to be the best time to buy a home for anyone who has been considering doing so. The extension is supposed to be until the end of April 2010, but there is no guarantee that interest rates are going to stay as low as they are. However, despite interest rates the first-time homebuyer tax credit offsets any hike in rates—in most people’s eyes—and should help those whose income has been affected by the recession.

Lenders are now more cautious in looking into the ability of a buyer to pay their mortgage but the first-time homebuyer tax credit is obviously helpful to anyone who can afford their payments and with the 30-year mortgage rate as low as it is the mortgage payment may be smaller then some people’s rent payments.

As always, there are mixed views on the first-time homebuyer tax credit, but do you think this is a good plan? Is extending the first-time homebuyer tax credit good for the economy or is it creating more debt than it is helping the economy?

Now that the first time home buyers tax credit has expired Americans are doing anything possible to save cash.  Some in the Texas area are looking for Craigslist Houston Used Cars as they hope to save money with a fuel efficient vehicle.  Gas prices in inching towards $4 a gallon so a Honda Accord or Toyota Camry is not a bad choice.