With positive trends being reported in both the number of units sold and the median selling price based on information captured by the Greater Northwest Indiana Association of REALTORS, Inc. (GNIAR) Multiple Listing Service (MLS) for 2009 through the end of May, the local real estate market is definitely moving in the right direction, according to Pete Novak, chief executive officer of GNIAR and member of the Northwest Indiana Housing Alliance.

"Buyers are becoming more aware of the fact that there are some good deals out there, and current trends indicate they are ready to act on them," he says. "We're also seeing sellers become a bit more aggressive with more buyers in the market. The government's first-time homebuyer tax credit is a significant incentive and has contributed greatly to the market picking up."

Based on current trends, with the number of closed sales exceeding any increase in inventory, members of the Northwest Housing Alliance continue to recommend that potential buyers act now for the best possible deals. It is virtually impossible to predict when a reduction in supply will lead to prices stabilizing and eventually appreciating again.

There is no doubt that the recent announcement by U.S. Housing and Urban Development (HUD) secretary Shaun Donovan, who was speaking to the National Association of Home Builders (NAHB) spring Board of Directors meeting late last month, will significantly impact inventory.

Donovan announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration's new $8,000 first-time homebuyer tax credit toward the purchase costs of FHA-insured home.

"We believe this is a real win for everyone," he said. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation's housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away."

Donovan indicated that this action will further help stabilize the nation's housing market by stimulating additional home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Previously, homebuyers could only access this credit after filing their tax returns with the IRS. This recent announcement details new FHA rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate.

According to estimates by the National Association of Home Builders, the government's homebuyer tax credit will stimulate 160,000 home sales across the nation - 101,000 of which will be first-time buyers who will receive the credit. Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home. Given FHA's current market share, it's estimated that thousands of families will be able to purchase a home by allowing the anticipated tax credit to be applied toward their purchase together with an FHA-insured mortgage.

If you're thinking about purchasing your dream home while selection and price continue to favor buyers, the best way to get started is one step at a time, according to the experts at the Northwest Indiana Housing Alliance.

Since most of us will be involved in a transaction of this magnitude just a few times over the course of our lifetime, the process of buying a home can seem extraordinarily complicated and even a bit scary.

As you begin your search for the perfect new home, consider creating a solid plan that covers all the necessary components of home ownership so you can make an informed decision that leads to the purchase of the right home for your personal situation. These components typically include examining your finances, researching loans, reviewing neighborhoods, comparing all the options from existing homes to new construction, making an offer and sealing the deal.

By tapping the expert advice and guidance of professionals affiliated with the Northwest Housing Alliance, homebuyers can ensure they have all the necessary bases covered. Since buying the right home, at the right price and on the right terms is dependent upon so many factors, it's important to work closely with informed, experienced and dependable housing professionals every step of the way.

Offering a one-stop resource for prospective home buyers and sellers that provides detailed information on everything you need to know from start to finish, members of the Northwest Indiana Housing Alliance include the Greater Northwest Indiana Association of REALTORS® (GNIAR), the Indiana Mortgage Bankers Association (IMBA), the Building Industries Association of Northwest Indiana (BIA), the Indiana Association of Mortgage Brokers (IAMB) and the Porter County Builders Association Inc (PCBA).