Is Now the Time to Buy a Home?
With Housing Prices at Record Lows, it Might Be Time to Buy
Mar 4, 2009
Homes are more affordable today than they have been since 1970, according to the National Association of Realtors. According to the association's Housing Affordability Index, which keeps track of how easy it is for an average family to afford a typical home, a family earning the nation's median income of $59,800 could in January afford a home that costs $283,400.
That compares quite favorably to just one year earlier, when a family making the nation's median annual income could only afford a home that cost $263,300.
Is Now the Time to Buy a Home?
That leads to the obvious question: Is now the best time in decades to buy a home? Unfortunately, there is no easy answer. That's because every buyer is different, and each has his or her own goals for owning a home. However, there is one certainty: This is a great time for first-time home buyers, who don't have a residence of their own to unload, to purchase a home.
The reason is simple: Houses today are cheaper than they've been in years.
According to the National Association of Realtors, the median price of an existing home is now $170,300. That is a big drop from July of 2006 -- just before the housing market began its long, and still ongoing, slump -- when the country's median existing home price hit an all-time high of $230,200.
Today, buyers who don't have homes of their own to sell first, face a great opportunity to purchase more home for their dollars.
It's a Terrible Time, Though, to Sell a House
Of course, on the flip side of this, it's an awful time to sell a house. Sellers are struggling to get anywhere near their asking prices. However, that doesn't mean that sellers shouldn't put their homes on the market. Sure, they may have to sell their homes for less. But they'll more than likely pay less for whatever new home they purchase.
The entire transaction may turn out to be a wash. Or, if the sellers are buying a larger, pricier home than they one they are selling, they may end up coming ahead.
Not a Time to Make Quick Profits by Flipping a House
Buyers should also consider their own goals before deciding to purchase a home. Now is a good time to buy a home for less, live it in for a long time and then sell once the real estate market has rebounded from today's slump. It may not a good time to buy a house, repair it and try to sell it quickly at a higher price. Buyers just aren't making offers quickly enough for such moves.
 |
