It's been a prime time to purchase real estate. Mortgage interest rates have been lower than 5%, real estate prices are way down, and sellers are motivated. To make things better, the government has offered huge incentives to purchase real estate. First time buyers get ,000 in tax credits when buying a house.
The government incentives have had their affect. First time home buyers include about 45% of real estate transactions.
Despite these favorable buying conditions, Fort Lauderdale, Florida home sales have been down. Last month, in Pompano Beach (a neighboring Fort Lauderdale city) home sales were down significantly compared with May of 2007. Boca Raton Real Estate also saw a remarkable decline from last year. Why are home sales are struggling even though purchasing real estate is so advantageous? People can't buy because they can't sell their current homes, they have no equity, no down payment, and can't get mortgage financing, or they just don't feel satisfied with their job security. Some of the government incentives have concluded. The sub 5% interest rates have increased to around the 6% range. A one percent increase in interest rates is a substantial deal for housing affordability. A 0,000 home loan at 6% is nearly 0 a month more than at 5%.
So what will happen when the government incentives end? It's hard to say. The economy and housing market do show signs of improvement, but It looks like the Fort Lauderdale area Real Estate market won't greatly improve in the near-distant future.