Tax credit and interest rate update

Tax credit extension goes down with Jobs bill failure, mortgage rates at all time lows

The extension of the tax credit until September 30 for homes under contract died with the Jobs Bill that failed to pass yesterday, which included other features. So Wednesday of next week is the true deadline to close. These contracts have already been signed so this shouldn't impact sales as long as buyers truly have the cash to close.

The continued upside for buyers are continually low interest rates. A record low according to Bankrate.com's 25 year survey. We were generally wrong in thinking interest rates would increase after the Fed finished its MBS program but as with all forecasts, new, randomly acknowledged issues arise and upset the whole dynamic. In this case, it was European debt problems and the stunningly poor quality of prior information on Greece and Hungary's fiscal positions. The flight to quality drove monies to U.S treasuries and this trickles into the mortgage market as lower mortgage interest rates.

While a lot of buyers are purchasing with cash in the Las Vegas market, those financing their homes are looking at continued low monthly payments when compared to similar rentals. This makes a home purchase a reasonable alternative to renting as long as it fits into your long term goals of remaining in the City. In many cases, buying is far cheaper on a monthly basis than renting.