Is Now the Right Time to Buy a House?
Posted November 2, 2009 by Bernz
The roller coaster ride that was the real estate market in the United States for the past year continues unabated in spite of federal efforts to bring some stability to the markets. Foreclosures across the country continue to rise and housing prices continue to fall. Mortgage rates are at historic lows, and that, coupled with low prices, is enticing many house seekers to consider dipping a toe back in the water.
But is now a good time to buy a first home or to upgrade from your existing one? The answer is “it depends”. It may be a very long time before real estate once again becomes a solid investment strategy. The days of steady housing price increases we have seen over the last decade may even be over forever.
It’s important to separate out your investment goals from your need for shelter. The latter you will need no matter what form it takes: a house, an apartment or even a tent in the woods. Evaluating whether buying a house meets your need for shelter is a simple task of comparing it to the alternatives. How does the monthly mortgage payment compare to rental payments you would have to make on a leased property? What happens to rates when you have to renew the mortgage? What is the condition of the house (i.e. could it result in thousands of dollars in repairs)? What other expenses would you incur that you wouldn’t have to with renting?
Deciding whether buying a house now makes sense from an investment perspective is a very different value proposition. If the house would be your largest investment, the current market makes it a potentially risky investment right now, especially if you need the money for retirement or other purposes in the next ten years. While most experts agree that the housing market will turn around in the future, there is no universal agreement on when that will happen. It may be next month, next year or not until 2030. If your investment time horizon is long enough, the combination of low mortgage rates and low housing prices may make the investment attractive, but, as always, consult your independent investment advisor before making such a large investment decision.
So, is now the right time to buy a house? The answer to that will be as individual as each person’s financial goals. It is, however, a perfect time to re-evaluate those goals and to determine if buying a new house fits.
Leave a Reply
All the articles and content written here on Invesmint.com is for general information only and based solely on the authors personal opinions and discretion. It was not and should not be a substitute for professional advice. Visitors of this site (Invesmint.com) are encouraged to seek appropriate professional advice before acting upon the content or information from this site. Again, the content of this website is not a source for professional advice.
INVESMINT.COM hereby excludes liability for any claims, losses, demands, or damages of any kind whatsoever with regard to any information, content, or services provided at our web site, including but not limited to direct, indirect, incidental, or consequential loss or damages, compensatory damages, loss of profits, or data, or otherwise.
Get Updates via Email
-
Advertisement
-
Recent Posts
Recent Comments
- Recession Proof Your Job: 4 Ways to Avoid Unemployment on Don’t push the panic button (yet!)
- Skirt» Blog Archive » what is hard money lending on What is Hard Money Lending And When Should You Use It?
- 401 k Plan on What is Hard Money Lending And When Should You Use It?
- San Antonio AC Repair Guy on Debt and Obesity Are Related, Study Finds
- Kat on Borrowing from your 401k Plan – Is it always the wrong thing to do?
- Tweets that mention An Introduction to Investing in the Stock Market -- Topsy.com on An Introduction to Investing in the Stock Market
- Philip Walter on What is Hard Money Lending And When Should You Use It?
- Tax debt settlement on Smart Ways to Get IRS Tax Debt Relief