Keep this in mind
• Mortgage rates currently are below 5 percent, and should remain low for the next few months, partially due to the Federal Reserve’s ongoing purchase of mortgage-backed securities. However, if the economy quickly turns around and inflation fears resurface, rates could rise to as high as 6.5 percent, slowing demand and pushing down home values.
• According to one analyst, the market will remain tilted in favor of buyers over the next year, but that power gradually will be reduced as conditions in the housing market continue to improve.
• Some home sellers are postponing listing their homes until the market recovers. However, timing the market is difficult, so homeowners thinking of selling should carefully weigh their options. Although existing homeowners are not required to sell their current home to qualify for the credit, those who plan to rent out their current residences should be aware that many lenders require borrowers to show they are financially capable of paying two mortgages, or show rental income for at least six months.
• Homeowners can reduce their energy bills by lowering the thermostat setting on their water heater. Most manufacturers set water heater thermostats at 140 degrees Fahrenheit, but most households don’t need water hotter than 120 degrees. Households with water heaters older than 12 years should consider replacing it with a new unit. This year and next, the federal government is offering a tax credit of 30 percent of the cost of qualified water heaters, up to $1,500.