Is now the time to buy a house?

I am constantly being asked by clients, is this a good time to buy a house? Industry experts believe it is an exellent time to invest in real estate.

In a recent "Market Insights" article called "Housing: A time to buy," Dr. David Kelly and David Lebovitz list four "Measures of Value":

1. Home prices relative to average household income. The ratio has reached an all time low of just 153%. The normal is 180% of household income. Great news for home buyers, your income will buy more house today.
2. Low interest rates. The active intervention of the Federal Reserve has brought mortgage rates to their lowest level in modern history. Lower interest rates mean more buying power or more house for your money.
3. The cost of renting versus the cost of owning. In 2007, the median mortgage payment was close to 150% of the median asking rent. Now the median mortgage payment is just 78% of the median asking rent. This means that it is significantly less expensive to own a home than to rent. In some metropolitan areas, we have seen rents increase by as much as 30%.
4. Home pricing relative to the cost of construction. Home prices have fallen so much that we will need to see an uptick before builders will be incentivised to increase construction of new homes. To buyers, this is a sign that now is the time to take advantage of low prices.

The conclusion of Dr. David Kelly and David Lebovitz is: "Today, when home ownership is depreciated more than ever before, the numbers tell us it is time to buy." To review the findings in their entirety, click here.

Bottom line: Now is the time to buy a house!

 

For further information on the home buying process or selling process, contact Todd Adams at 503-332-5227 or visit Home Search