Time is running out of the federal tax credit for first-time and repeat homebuyers.

First-time homebuyers can receive a tax credit of 10% of your home purchase price up to $8,000.

Current homebuyers can get a tax credit of up to $6,000 if you have owned and occupied your current residence for five consecutive years out of the last eight years and you decide to buy a new home.

To qualify for either of these tax credits, you need to act now. You must have a contract in effect no later than April 30, 2010 and close no later than June 30, 2010. Qualifying buyers can purchase a property with a maximum sales price of $800,000.

Home mortgage rates fell for the second straight week, hovering near record lows, mortgage giant Freddie Mac said Thursday.

The average 30-year, fixed-rate mortgage slid to 4.93 percent from 4.97 percent last week. The record low is 4.71.

The average 15-year, fixed-rate mortgage dipped to 4.33 percent from 4.34 percent.

Five-year, adjustable-rate mortgages dropped to an average 4.12 percent from 4.19 percent, and one-year ARMs averaged 4.23 percent, down from 4.33 percent.

More Chicago-area homeowners defaulted on their mortgages during the final three months of 2009 than in any other quarter since the housing crisis began in 2006.

The year-end figures, scheduled to be released Thursday by the Woodstock Institute, paint a picture of a local housing market brutalized by foreclosures over the past three years. Last year, more than 70,000 homeowners in the six-county area, including 24,053 in the fourth quarter alone, received initial notices of mortgage defaults, the first step in the foreclosure process, and those defaults increasingly were in more affluent neighborhoods, the report showed.

What the data doesn't show, but what is widely predicted, is that there will be no slowdown in foreclosures this year. Despite almost yearlong efforts to stem the tide of foreclosures, high unemployment rates are causing more homeowners to miss mortgage payments. Some observers expect both the number of people in foreclosure and the number of vacant properties on the market to increase as consumers fall out of loan mitigation programs and lenders release their foreclosure inventory onto the real estate market.

"Lenders are continuing to proceed with foreclosures while also trying to negotiate, in theory, the loan modifications and do the trial mods," said Geoff Smith, Woodstock senior vice president. "My sense of what's going to happen is the economy is still weak, you still have the underwater homeowner issue, and there's concern that any modest recovery of the housing market will go away with the [homebuyer] tax credit."

Woodstock found that for Chicago, initial foreclosure filings increased by 10.2 percent, but the activity varied widely by neighborhood. Some of the largest percentage gains last year were in Lincoln Park, up 103 percent; Near South Side, up 46 percent; and Near North Side, up 37 percent.

At the same time, some of the communities hardest hit by the first waves of the foreclosure crisis — neighborhoods such as Austin, Hyde Park, Auburn Gresham and Englewood — reported fewer foreclosure filings last year than in 2008.

"In '06, '07 and early '08, the main driver was badly written loans," Smith said. "As those loans cycle out of the system through the foreclosure process, the economy hasn't improved, you see that [unemployment] is maybe more of a factor."

At the end of October, almost 10.5 percent of mortgages in Illinois were at least one month past due but not yet in foreclosure, and another 10 percent of loans were in foreclosure and at least 90 days delinquent, according to the Mortgage Bankers Association.

For the entire Chicago Tribune article, click here.

Torday's Sun-Times had some positive news about the real estate market and I'm reprinting it here:

The number of people preparing to buy a home rose slightly in December, a positive sign heading into the spring home buying season.

The National Association of Realtors said Tuesday its seasonally adjusted index of sales agreements rose 1 percent from November to December to a reading of 96.6.

The index has risen for nine out of the past 10 months as buyers work to take advantage of an $8,000 first-time homebuyer tax credit.

In addition, homebuilder D.R. Horton reported its first profit in three years, raising hopes that one of the weakest parts of the economy is improving.

The signs of strength in the housing market pushed the Dow Jones industrial average to its second straight gain of more than 100 points.

For the article on the Sun-Times site, click here.

The Chicago Tribune had a great article on selling your home and I've decided to reprint the tips here again for my readers:

1. Don't wait for a recovery

Home values aren't likely to rebound to previous highs for several years; perhaps even a decade. While you may face a loss by selling now, that negative figure may only be a paper loss, particularly if you've owned your home for some time.

2. Make improvements

If you have access to credit, invest in improving and repairing your home before placing it on the market, rather than trying to go for a quick as-is sale. Rehabs are more affordable now, thanks to the availability of low financing, reduced construction materials costs and lower contractor charges. Focus on upgrades to kitchens and bathrooms, especially counters and cabinets, as these yield the highest returns. Get three different estimates from contractors and add another 10 percent for unexpected costs. See Yahoo-RealEstate's strategies and checklist for upgrading and repairing your home at realestate.yahoo.com/Realtors/Ready-to-Sell_Checklist.html.

3. Hire professionals

You need professionals, not friends or relatives, to repair, upgrade and sell the biggest investment you'll likely own. Your real estate agent should be well-connected with other agents, lenders and industry professionals. Ask for credentials, references and a history of recent performance.

Your appraiser should have at least five years' experience with an appropriate license or certification. Avoid any conflict of interest by not relying on your real estate agent's recommendation. The same applies to hiring a home inspector. Talk to at least two or three appraisers and inspectors before selecting one.

4. Get down-payment assistance

Federal and local governments offer several down-payment assistance programs for first-time homebuyers. Look for other city, county and state programs that will piggyback on federal programs for assistance. Search for "down-payment assistance programs" with the name of your region.

5. Take Uncle Sam's help

The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers qualify if they sign a binding contract to purchase a home by April 30 and close by June 30. The program's maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.

A separate $6,500 tax credit has been added for those who have owned their homes for at least five years and want to upgrade to a new home. Homeowners drowning in their present real estate loans are eligible for a loan-modification program with their current mortgage company or loan service through the Making Home Affordable Program.

6. Price accordingly

Listings move when a property is appropriately priced. Others gather dust because the owners haven't adjusted their expectations to the present market. This doesn't mean, however, you should severely drop your price on a well-maintained home to avoid extended problems. Research your market and price accordingly.

7. Energy tax credits

Through Dec. 31, homeowners who buy and install specific energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can apply for a 30 percent tax credit of up to $1,500 of their costs on each product.

Go one step further and earn a 30 percent tax credit through 2016 (without a spending limit) when you purchase such energy-saving products as solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems. 

8. It's not personal

Buyers want to imagine themselves in your house for years to come. Excess decor and knickknacks distract from this vision. Ask your real estate agent's advice or hire a home stager to bring your house back to zero before beginning to show it. A general rule of thumb is to eliminate or store at least half the items in every room.

Don't get defensive about colors, design patterns or flooring you installed. Just grit your teeth and think of the closing check while your agent serves as a buffer. Remember the customer is always right, unless, of course, they're low-balling you.