Putting off buying could be a mistake.

Many buyers have put off buying due to the holidays and the cold weather. First time homebuyers eligible for the tax credit have also put off the decision to buy now that the program was extended until April 30th, 2010. Delaying buying a home though until Spring could be a mistake for the following two reasons.

As some of you know, the Federal Reserve has been buying mortgage obligations for the past few months which has artificially kept rates low. The Fed has recently indicated that this program will be coming to an end. Consequently, expect the rates to slowly creep up to a level of around 6%.

Another reason not to delay buying is the anticipated demand for houses always goes up after the holidays. As demand increases early in 2010 and this time accelerates as we get closer to the April 30th deadline, buyers can lose the home of their dreams or pay more for it than today.