Are you on the fence about making a home purchase?  Are you thinking that you will by a home while the market is down and you can take advantage of the amazing deals on homes coupled with historically low interest rates?  But are you also thinking there is no hurry and there is no reason to be in a hurry?  Well if this is the case you may be right, but lets look at a few facts that when linked together could spell out a different story:

In the greater Oakland, East Bay market place we are witnessing a very competitive atmosphere for the hot properties that come on the market.  Especially the homes under $729,000 where you can go non-jumbo loan.

We see the current market as one in which stars are aligned for buyers.  Rates are low and there are some great properties to be purchased.  The coming months however, may not be quite as good.  Now we have inventory and rates on the side of buyers but as the holiday season approaches, we can expect to see inventory decrease as both buyer and sellers get pre-occupied with the holidays.  Lowered inventory will have an effect on the truly motivated buyers who will not have as much housing inventory to choose from, which means that come January the buyers may be in even greater competition as homes begin to trickle back on.

Now let's jump to March 31st 2010.  The feds have announced that they will be slowing down the rate of their purchasing mortgage back securities and their intention is to continue it to March 31st, 2010 at which time they will discontinue the purchasing all together. Their thinking here is that it will make for a smoother transition as they stop buying these securities, giving way to the private marketplace to do the purchasing. Experts read into this that you will see mortgage rates slowly move upward into next year and then settle into a new zone. Lets’ keep in mind that the rates we’ve enjoyed most of this year are exclusively a byproduct of their purchasing $1.25 Trillion of mortgage backed securities (the products which are created after your mortgage is placed and sold) and will no longer be here once this program in concluded.

In conclusion, next year could easily be one in which a backlog of buyers are scrambling to buy homes before rates start going up making it harder to actually purchase a home at all.  If you wait it out beyond that cycle you may be fighting raising interest rates that will be effectively eroding away your purchasing power.