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4 Strong Reasons to Buy a Home Now

“It’s hard to argue against buying a house now, assuming you can get a loan,” writes John Waggoner, a columnist with USA Today. Sure, Waggoner says that getting a credit check for approval of a mortgage can be a “only slightly less intrusive than a CIA background check,” but for those who are able to qualify, a lot of analysts say that now can be a good time to purchase a home.

1. The price is right. The median single-family home price hit its lowest in more than a decade when it reached $154,600 in January, according to the National Association of REALTORS®. That was the lowest since October 2001. During the height of the housing market in July 2006, the median home price for a single-family home was $230,900.

2. It’s cheaper to buy than rent. In nearly every major metro market, it is cheaper to buy a home than rent. Rents have been on the rise the last few years and are predicted to continue to rise. Meanwhile, home affordability is at record highs, which means that buying a home is more within reach to the median income family.

3. Inventories of for-sale homes are shrinking. Ned Davis Research estimates that excess inventories of homes to be eliminated by the end of next year. “When excess supply dries up, people start building more new houses, which has the virtuous effect of reducing the unemployment rate and increasing the economy generally,” according to the USA Today article.

4. Mortgage rates are at record lows. Mortgage rates have hovered near record lows for weeks, which has helped pushing housing affordability higher. For example, the average 30-year fixed-rate mortgage, which is the most popular among home buyers, is 3.59 percent, according to Freddie Mac—just above its record low set on July 26 of 3.49 percent average. “It’s conceivable that at some point in the next 30 years, your interest rate would be less than the rate of inflation,” writes Waggoner for USA Today.

Source: “If You Can Pull it Off, a House is a Smart Investment,” USA Today (Aug. 9, 2012)



10 LESSONS LEARNED AS THE MARKET RECOVERS
On July 18, 2012, in Housing Market News, Ron Phipps, Uncategorized, by NAR

by Ron Phipps, 2012 Immediate Past President, NAR

Headlines abound: The Housing Bust is over… In June, a survey of economists concluded that housing has hit bottom.  Realtors®, homeowners and renters, Americans, and citizens of the world all are sighing with collective relief.  The economy and housing values both have cycles.  It has been more than eighty years since the difference between the top and the bottom was so great.

As Realtors®, we are relieved that we are at the bottom, but we are realistic with the changes in the market and our work.  In the not too distant past, the overwhelming majority of our work was prior to sales agreement, now it can be after.  In that same time, most transactions closed.  The”fallout rate” was nonexistent.  Most sobering is what is now required to get to closing and how many things can derail a transaction for a “willing, ready, and able” buyer.

So we are cautiously engaging the new reality, but first we need to pause.  If we do not learn from history, we are bound to repeat it.  We do not want to repeat the last ten years.  So what are the lessons we should learn?  Here are 10 lessons that come to mind:

  1. The economy cannot recover without housing.
  2. Everyone needs shelter, but not everyone needs to own their shelter.
  3. High homeownership rates are important but they must be sustainable.
  4. Home prices go up and go DOWN.
  5. The process of purchasing /financing a home is more complicated.
  6. Sound underwriting of mortgages is critical.
  7. Home equity should not be used for ordinary living expenses.
  8. Financial reserves for family, companies, and countries are necessary.
  9. Homeowners confidence in the economy is directly related the value of their own homes.
  10. The economy is global.

What lessons did the last decade teach you? We would love to know what you learned from the last cycle.

What is important is that we remember what happened as we prepare to write the future.  Most importantly, we should also have a sense of accomplishment that we endured these life lessons.

There are seasons in the weather: spring, summer, fall and winter.  So there are in economic cycles.  It is great to be at the thaw of winter and the budding of spring.

10 Lessons to Learn as the Housing Market Recovers

 

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