Bargains abound: What are buyers waiting for?

With low home prices and ultra-low interest rates, the housing market now offers “perhaps the best deals of a generation,” notes a recent article by Bloomberg Businessweek.
Since the housing boom of 2006, home prices have fallen about 31 percent. Also, mortgage rates have been hovering at record lows for the past few weeks  – in the 4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac’s mortgage market survey.
The article notes the following scenario: Buying a $300,000 home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012, but mortgage rates will increase by a half-point. Under that same loan scenario, a home would sell for $289,000 while the monthly mortgage bill would be $1,171 – only a $26 difference.

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