The current dynamics of the US housing market couldn’t be more favorable for buyers, according the US News and World Report’s 2010 Home Price and Mortgage Rate Outlook. According to the report by Luke Mullins, historically low interest rates, near-bottom prices, an FHA financing option, and a federal tax cut for first-time and move-up homebuyers put today’s purchaser in line to get a good deal at a good rate, with almost certain future return on their investment.

But these favoring conditions will not last long- recent buzz in the financial and real estate circles indicate that beginning as early as April, a series of federal and economic changes will start shifting the market advantage away from buyers.

“If you want to buy a home,” writes Brian O’Connell in an article with Mainstreet, an online business and financial news and advice magazine, “do it in the next [month or two].”

Climbing interest rates, predicted by financier giants Fannie Mae and Freddie Mac, might be the single most motivating reason many advisers and lenders are urging to buy now.

Now coasting at just around 5 percent, mortgage rates haven’t broached figures this low since 1971. But rising from this all-time low, the US News report indicates that mortgage rates are expected to reach 5.5 percent by April, and 6 percent by the end of 2010.

“The difference between 5 percent and 5.5 percent could mean the difference between refinancing or not,” writes Greg McBride, a senior financial analyst at Bankrate.com, a personal finance web site, in the Washington Post’s mortgage rate report.

“No one thinks interest rates are going down,” concedes Bob Gable, a local Sales Manager with Bellevue’s Wells Fargo Home Mortgage. The current rates have been kept artificially low, Gable explains, because the Federal Reserve has been buying bonds instead of private banks.

But the Fed announced recently that this program will end in March, allowing rates to bounce right back up. Even if real estate prices dropped another 5 percent, Gable said, he could save buyers an average $130 monthly on a $400,000 home just by locking them in now at a 5 percent interest rate.

“If you’re waiting for prices to drop later this year, there’s no point,” Gable says. “Because you’ll lose money even if they do [as interest rates increase].”

And listening to Gable might be a safer bet than he knows.

Because in spite of recent media speculation to the contrary, and planning by lenders like Gable, economists expect home prices to in fact rise by the end of 2010. According to the US News report, home prices now sit at lows not seen since pre-recession 2003. Though they might take incremental dips toward the middle of the year, prices are expected to inflate overall as the economy recovers this year.

And that will happen sooner than most think, according to the American Bankers Association Economic Advisory Committee, which predicts an end to the recession and the beginning of price hikes and inflation by September of this year.

“There are many signs of things improving,” says Royce Koh, a Sales Executive with Washington Square Condominiums. “But if the buyer waits to acknowledge that, they will have missed their window of opportunity to buy while things are affordable.”

But rising prices and interest rates aren’t the only reasons economists are urging lookers to buy now- For buyers hoping to save money with current federal buying incentives, waiting could be costly.

The federal homebuyers tax credit, which now offers qualified first-time purchasers $8,000 and move-up buyers $6,500, will be terminated by the Fed effective June 2010. And for homebuyers dreading tax hikes expected for 2010, purchasing now could lessen the burden of next year’s taxes.

In addition, the government’s FHA financing program, which today allows buyer to purchase with as little as 3.5 percent down, lower monthly payments, and protection against foreclosure, is expected this year to tighten its qualification standards and raise insurance premiums. With federal plans to make fewer buyers eligible and to raise up-front cash requirements, securing an FHA loan today could make or break the buyer’s decision to purchase at all.

Given the forecasts, Mike Nielson, Chief Operating Officer at Washington Square, points to the conclusion responsible buyers should fall on.

“With condominium prices now well below the cost of construction, historically low mortgage rates, and the current governmental incentives for buyers,” he says, “intelligent buyers will make the move now while the stars are aligned.”

For buyers who’ve already decided that today’s the day, the question of ‘where’ may still linger. A number of factors should influence this vital decision, according to Koh cited earlier.

“The first thing you need to look at is the financial condition of the region,” says Koh. The outlook for local industries, the educational systems, and the geographic advantage all increase the long-term value of an area.

The Northwest, says Koh, can be deduced as one of the most stable economic regions. Supporting his claim, CNNMoney.com rated the Seattle area one of its 8 “Best Recovery Bets” because of its diverse economy, and solid industries.

And as one of the highest net worth cities in the U.S, Koh points to Bellevue as the epitome of Northwestern success. With local technological, engineering, retail and entertainment industries expected to flourish, he says, downtown Bellevue also happens to have some of the country’s best-rated school, medical, emergency and transit systems.

For buyers who have done their research and landed on downtown Bellevue as their destination, Gable says the decision of where to buy requires careful consideration.

“Buyers want a building that has longevity and a track record,” Gable says.

The last thing he wants borrowers at his firm is to see is their new condominium community foreclosed by a bank, because there wasn’t enough money into the product to keep it stable.

“Personally, I tell them to go to Washington Square,” says Gable. ‘It’s already proven itself in sales success. People want to know, ‘is the building going to last?’, and here we already have the answer.”

Real estate is always a risk, cautions Koh. But the goal, he says, is to minimize that risk and maximize potential for gain.

“Of the main players in downtown Bellevue, we’ve got the highest sold percentage, and the highest occupancy,” he says. According to recent tallies, Washington Square boasts 207 closings, totaling 55% of the project’s unit inventory.

And occupancy levels at this point in the market are the deciding factor for financial success in most condominium projects, says Kelly Molitor, Building Account Manager with the Chicago Title Insurance Company.

“The majority of sales we are seeing these days on new construction condos are short sales,” she says, noting that the projects exempt from this trend are few.

Adding to the implicit value of Washington Square’s sales success, notes Brandon Ehrlich of MetLife Home Mortgage, is the rarely coupled duo it forms with their package of buying options. The first condo project in the region approved to extend FHA loans, they also offer Fannie Mae and several other financing options through preferred lenders.

“Washington Square has the most sales,” he says, “and the full spectrum of available loan products at their fingertips.”

But beyond considering the economic time frame, interest rates, prices, location, financial stability of the developer, and their buying options, Jody Hughes, Sales Executive with Washington Square, encourages prospective buyers to look at one more thing.

“If we were just two towers, in spite of our success, we still wouldn’t be that different,” he says.

“But if we’re an established community- with 207 real people here who can already tell you this is home- then we’re something special. We’re not just where you are, we’re where you live.”

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