April 13th, 2012
In his MSN Money article, “Why now is a good time to buy a home,” Eric Pianin sums up the primary reasons why now is a good time to buy a home.
Housing affordability is the best it has been in more than two decades, Pianin explains, as both mortgage rates and home prices are low, which is much more rare than many consumers believe.
“Housing affordability, a ratio of the typical household income relative to the annual income necessary to buy a median-priced home at prevailing mortgages rates and under reasonable underwriting criteria, decreased dramatically in the early to mid-2000s as home prices rose, despite low mortgage rates. Since the peak in home prices, mortgage rates have declined even further, home prices have declined, and affordability has risen dramatically,” Pianin said.
In other words, low mortgage rates or low home prices usually drive home purchases. When both of those factors are low, which isn’t often, it’s the absolute best time to buy.
At the same time, rental prices are expected to increase as much as 4 percent, Pianin said, referring data from a Fannie Mae survey.
Read Pianin’s article here