Spring thaw in prices and rates, plus incentives draw home buyers

WASHINGTON, May 6 -- The frozen housing market appears to be thawing as more buyers are finding the current historically low interest rates, stabilizing prices and tax credit refund incentives irresistible.

"Today's market offers an incredible opportunity with the unprecedented combination of a 40-year low in interest rates, prices returning to normal levels in many markets, and limited-time tax incentives," said Joe Robson, chairman of the National Association of Home Builders and a home builder from Tulsa, Okla.

The number of homes under contract increased in March, according to the National Association of Realtors' Pending Home Sales Index, which increased 3.2 percent from February to March.

Optimism about the housing market is on the rise as well, an April 16 Gallup Poll found that 71 percent of Americans said that now is a "good time" to buy a house, an 18 point increase from one year ago and the highest level in four years.

Natasha Smith had been monitoring interest rates and home prices, but decided to take the plunge when the $8,000 first-time home buyer tax credit was enacted in February. The 25-year-old closed on a condominium in the Washington, D.C., suburb of Hyattsville, Md., in April.

"I wasn't in a rush as I continued to watch prices fall, but when I heard about the $8,000 tax credit, I knew it was the perfect time to buy," she said. "Combined with the low home prices and interest rates, the tax credit was the extra push I needed to get out of the family home and into a home of my own."

Get more information about the $8,000 first-time home buyer tax credit, which ends on Nov. 30.