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Wall Street Journal & Forbes: It’s Time to Buy A Home

We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.

The Wall Street Journal

Last week, in an article entitled It’s Time to Buy That House, the WSJ told their subscribers:

“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:

“Now could be the best time in history to buy a home.”

Forbes.com

In a report to their subscribers, Capital Economics reported that:

“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”

Why is this important? Last week, Forbes explained to their readers:

“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”

They went on to explain the advantages of homeownership during retirement:

“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement…

At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?

Bottom Line

When the iconic financial newspaper and the iconic financial magazine say that it now makes financial sense to purchase a house, perhaps it’s time to buy a home.


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19 replies
  1. Vito Simone
    Vito Simone says:

    Just imagine how good a decision it would have been back in 1980 to have purchased Apple stock with a long term strategy to keep buying. I seem to recall it was about $19.00 a share!

    Today’s real estate market is no different. If you are equipped with the right information and assistance, making a good decision is easier than one might think. As a HUD 203k Consultant, I see the housing opportunities people are buying into that they can rehab and grow their equity – over time. Of course, only time will tell.

    Reply
  2. AZ Golf and Home
    AZ Golf and Home says:

    We write about this topic often on our blog and yet we don’t think low interest rates is the best reason for someone to buy a home. Sure, it makes the investment more affordable, but perhaps the discussion should focus on how the investment will improve quality of life, work opportunities, a better environment for kids, etc. It’s true that for the most part real estate will always be a good investment OVER TIME but it’s also true that to focus on the eventual sales price of the investment you make today is part of what got the country into this real estate nightmare.

    Reply

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