While home prices and sales have been in a slump since for the past year or so there has been some good news for people looking to move into a home for the first time. First time home buyers have been given an incentive to take out a mortgage with a generous $8,000 “first-time home buyer” tax credit. The tax credit is only available for a limited time and is scheduled to end as of November 30, 2009. This means that all those people who are working out the banking details to get their home loans approved and mortgages worked out only have a few more days before it may be too late to take advantage of this offer.

A lot of home loans and mortgages actually require a 45 day escrow, which means that after October 15th it may be exceedingly difficult to qualify for the federal tax credit unless congress extends the extension deadline.

This means that the next few weeks is going to be a busys time for realtors and mortgage bankers as everyone hustles to get the paperwork filed, deals made and loans signed. During any other time the $8,000 tax credit would be a welcome perk, but not necessarily create the influx of home sales that the current stimulus program tax break has started.

Two additional factors are making the next few weeks one of the best times in the past decade to purchase a new home.

First, mortgage rates are still very, very low. Many larger banks have tightened up their lending rules, especially for mortgages and other home-related loans, but smaller banks are still doing brisk business in neighborhood and community home loans because it gaining more local customers will work in their favor.

Second, home prices are the lowest they’ve been in years as well, with some housing markets having an average home selling price that’s comparable to what prices were in the early 1990′s. Additionally, housing sales have been slow, sellers are now ready to take drastic measures and profit cuts just to sell their homes to anyone who will even look at their homes.

After the $8,000 tax credit expires home sales and mortgage applications will likely slow, but not stop. If you’re one of the lucky ones who still has steady employment and a decent credit history then now might be the perfect time to go house shopping and get approved for a great deal on a home loan.