Time to Buy? Yes!
It was refreshing to see a headline in the weekend Wall Street Journal declare that "It's Time to Buy That House."
The article, written by Smart Money columnist Jack Hough, appeared on the front page (B7) of the Weekend Investor section and analyzed how buying beats renting in many communities these days. A few excerpts:
"Two key measures now suggest it's an excellent time to buy a house as a long-term residence or an income property (but not for a quick flip). First, the nation's ratio of house prices to yearly rents is nearly restored to its pre-bubble average, suggesting the financial advantages of home ownership once again await buyers. Second, when ultra-low mortgage rates are taken into consideration, houses are the most affordable they've been in four decades of data.
"... For most house buyers, mortgage rates are a key determinant of their total costs. Rates are so low right now that houses in many markets look like bargains, even if price-to-rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or points.) The latest rate is still less than half the average since 1971."
In the column (which also appears on the Smart Money site with a slightly different headline), Hough goes on to say that investors are taking notice of these attractive conditions as well, with good mathematical reason.
Material like this goes far beyond the "It's a good time to buy" message consumers expect to hear from Realtors. The fact is, historical conditions have created opportunities that haven't been available in years. We need to make people aware. Because for many people, Hough concludes, the smart move right now is action.
"Houses aren't the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and attractive investment yields are scarce, as now, buyers should jump."
What are you seeing locally? Do you think consumers are beginning to realize what a good deal home ownership is right now?