The Federal Reserve, in a move aimed at keeping interest rates low for home buyers through early next year, decided to extend and gradually phase out its purchase of mortgage-backed securities.

The Fed’s action signals its belief that the economy, while in recovery, remains fragile and that housing, which has seen some improvement in recent months, has only started to pull out of its slump.

“We definitely need help from the government,” says Lee Barrett, president of Century 21 Barrett, a real-estate brokerage firm in Las Vegas. “I don’t think the market can make it on its own.” He also hopes Congress will extend tax credits for home buyers due to expire at the end of November.

The central bank left its interest-rate target unchanged at zero to 0.25% and maintained its expectation that the federal-funds rate, or the rate banks charge each other for overnight loans, would remain low “for an extended period.”

“Economic activity has picked up following its severe downturn,” the Federal Open Market Committee said Wednesday in a statement after a two-day meeting. Though conditions in financial markets and the housing sector have improved, household spending “remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit,” the Fed said.

Housing Affordability Index- Measures the degree to which a typical family can afford the monthly mortgage payments on a typical home.

• A typical home is defined as the national median-priced, existing single-family home as calculated by NAR
• Typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census
• The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board
• These components are used to determine if the median income family can qualify for a mortgage on a typical home.

Reasons why now maybe the time.

• Housing affordability is at a high from the 30+ year high
• Interest rates are at a 50 year low
• There are a lot first time home buyer programs available
• These programs have a flexibility
• There’s lots of inventory in Santa Fe and surrounding areas especially in the first time homebuyer’s segment of the market
• Prices are lower, so it’s easier to enter the market than it was during the real estate boom
• The $8,000.00 tax credit is expiring the end of November 2009.

• Single Family Homes sales were up 171% from August 2008 to August 2009.
• Condo and Townhouse sales were down 42% from August 2008 to August 2009.
• This means Single Family Homes are more affordable.
• As of September 11, 2009 there were 106 single family homes available in the city, Eldorado and Rancho Viejo.
• As of September 11, 2009 there were 178 condos and townhouses available in the city, Eldorado and Rancho Viejo.

All of these factors are indications of opportunities that exist in the Santa Fe market. If you’re considering buying in Santa Fe, you should contact a first time first time home buying specialist and start a dialogue. Based on this conversation you can create a plan to purchase a home.