Good news / Bad news on the National Housing Front

The Good
A $15,000 incentive for home buyers was recently added to the stimulus bill making its way through Congress. Senate legislators unanimously approved a proposal Wednesday allowing a tax credit for home buyers of 10 percent of the purchase price of new or existing homes, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time home-buyers. It's not a done deal, though. The provision could be removed from the bill prior to final approval.

The Bad
Mortgage rates are inching up this week, despite the Federal Reserve's best efforts to keep them low. Freddie Mac reported a jump in the 30-year fixed rate to 5.25 percent in the week ended Feb. 5 from 5.10 percent the prior week. Experts say home-loan interest is on the rise because long-term Treasury bond yields have climbed and because mortgage lenders are upping rates to ease the flood of refinancing applications. (Source: The Los Angeles Times, Tom Petruno, 02/06/09) Still, 5.25 percent is a really low interest rate -- when Phil and I bought our first home in the late '90s, rates were in the low 8s.