Reason Number 1- Homes have never been more affordable.
For individual home buyers, there are only a few facts that really matter:
1) Can I afford this home?
2) Is it a good deal?
3) Does it meet my family’s needs?
It’s a bit surprising that the most important housing statistic has gone largely unreported: Homes have never been more affordable. In fact, affordability, measured by the median mortgage payment on the current median-priced home ($182,400 nationally) as a percentage of the median household income ($64,400), is lower than it’s been in a generation, currently at 14.9%.
One of the advantages of buying at the lower end of the market is that in a few years it will appreciate more than homes that are more expensive. There is less demand in the higher price points- demand drives price increases, and, as the market improves, demand for lower price points will go up faster than at the higher end. If one owns a home for 5-7 years (the average amount of time most buyers stay in their home), at this price point, one would at least break even, and most likely enjoy equity.
Currently, it is less expensive to BUY a home than to pay rent. Think about it this way- everyone buys real estate. The question is whether one buys it for themselves or for the landlord.
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