Brett Arends of the Wall Street Journal has an interesting argument he pulled together using the latest Case-Shiller data, and double checked against Census data.
In short, now is a good time to buy a home.
WSJ says the time is right for Temecula First Time Buyers
Real estate has now fallen 30% from its 2005 peak, at the same time as mortgage rates have also plummeted. In 2006 you had to pay an average of about 6.4% on a 30-year fixed loan, according to the Federal Reserve. Right now you can get deals for about 5%.
On average, buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal.
- But what about waves of mortgage resets coming in the next two years?
- What about all the unemployment?
- And the foreclosures?
Arends says these are all valid arguments for refusing to buy homes when they are expensive, or even averagely priced.
But the whole point about markets is that they adjust. Prices are now cheap. They reflect this bad news, and more. If you have a stable income, and you can get a 30-year mortgage at 5% or so, and you are willing to drive a hard bargain on a home in this market, this is your time
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