First time home buyers have received incredible help from the Federal government.
The biggest incentive is the $8,000 tax break.
Couple that with the $10,000 tax credit here in California and you have a real deal.
Well, California's incentive was phased out in August and the Fed's tax credit also ends soon.
But experts say the real game-changer will come when the government stops propping up Fannie Mae and Freddie Mac.
Come April 1st the Federal Reserve which has already pumped $1.25 trillion into this failing real estate sector will stop doing so. Mortgage experts expect interest rates to increase a full percentage point.
"I would tell everyone who is interested in buying a home or sitting on that fence right now you better get out there," said loan officer Paul Salazar.
For the last three weeks mortgage rates have been below 5%.
According to Freddie Mac average interest rates have fallen on both 30-year and 15-year fixed-rate mortgages.
However Salazar warns refinancing could backfire. "For some people the door may be closed on them because of equity in their property. They may have bought their house at the time when the market was very high," he said.
Now those homeowners are up upside down on their mortgage.
But for first time home buyer Christina Flores the Federal incentive came at a perfect time.
"It's been a long process. We've waited so long and finally our dream has come true," said Flores.
When Flores first tried to purchase in 2005 homes were in the 400's, her credit was bad and she needed a better paying job.
Flash-forward 5 years and homes are half the price, Flores's credit has improved and she has a stable job in the medical field.
Flores: "And we just knew that we were going to be able to get our home this year."
Flores should move into her home Friday with a 30-year fixed rate of 5.25%.
Good news because Salazar warns interest rates could easily climb to 7% within a year.
