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7 Reasons Why to Buy Now

7 Reasons Why to Buy Now

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Published by Dennis Hoffman

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Published by: Dennis Hoffman on Mar 15, 2011
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03/15/2011

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K E L L E R W I L L I A M S R E A L T Y
A Smart Buyer’s Guide to Seizing the Market
7
Reasons Why 
Now
is a
Great Time to Buy
a Home!
 
A S m a r t B u y e r s G u i d e t o S e i z i n g t h e M a r k e t
kw
2
It’s Prime Time!to buy a home
No doubt you’ve heard the news:
 
the housing market hit a rough patch thissummer. Sales of existing homes declinedat a rate that took many by surprise,sending pundits into a “what’s next”tailspin.As the prognosticators pondered, savvy buyers didn’t miss a beat. They gotthat the doomsayers were taking a one-dimensional view of the buyer’s marketand thatmarket skittishness gives rise toan even more favorable climate for buyinga home.Recent history has reframed some of whathad long been taken for granted aboutbuying a home.Namely, we’ve learned that
even thoughbuying a home remains one of the bestand safest investments available, a homeshould not function as an ATM or a short-term speculation strategy 
.So, where does that leave us? A lotsmarter, able to recognize an opportunity when we see one, and aware of the factsthat point to NOW as the
prime time 
tobuy a home.Doug Duncan, Fannie Mae’s chief economist, contends that furtherintervention at the federal level willbe counterproductive. At today’srock-bottom rates, buyers stand tosave $8,000 many times over duringthe course of a 30-year mortgage.
News Flash!
Another $8,000 tax credit isoff the table
At a Glance:Why NOW is the Prime Time to Buy!
Home affordability is at an all-time high.
Themedian mortgage payment on the median pricedhome as a percentage of the median householdincome is lower than it’s been in a generation.
Mortgage rates are at rock bottom. 
It’s hard toimagine interest rates going much lower, andwhen they start to inch back upwards, monthly payments and total loan costs will spike upwards.
Home prices are back on the rise.
After decliningfor 30 months, home prices are trending back upward. The time get in to the market is NOW!
Sellers are motivated.
This means that buyershave the upper hand! From banks looking todispose of foreclosed properties to homeownerswho are fiercely competing among an excess of housing inventory, buyers have untold choices andnegotiating power.
Financing is readily available!
 Banks are back in the game and ready to lend to well-qualifiedbuyers.
Owning vs. renting is increasingly favorable.
Since 2009, the average principal and interestpayment has fallen below the average rental rates,and the gap is now wider than it’s been in the past22 years.
Homeownership is still at the core of theAmerican Dream!
Owning a home is criticalto financial stability and wealth building. It’sa forced savings account, a place to live and afabulous tax deduction.
 
A S m a r t B u y e r s G u i d e t o S e i z i n g t h e M a r k e t
kw
3
5%10%15%20%25%30%2010
YTD Average
200920082007200620052004200320022001
20.3%25.1%14.9%
Homes have never been more affordable
For individual home buyers, there are only a few facts that really matter:
•
Can Iaffordthis home?
•
Is it agood investment?
•
Does it meet my family’s needs?So it’s a bit surprising that the most important housingstatistic has gone largely unreported:
homes have neverbeen more affordable
. Affordability, measured by themedian mortgage payment on the current median-priced home ($182,400) as a percentage of the medianhousehold income ($64,400), is lower than it’s been ina generation. The chart below, which tracks housingaffordability for the past 10 years, shows incredibleimprovements in affordability since the height of thereal estate boom in 2006.
1.
Median mortgage payment as a percentage of median household income
“Home buyers over the pastyear got a great deal, andbuyers for the balance of thisyear have an edge over sellers.Affordability could reach agenerational high in the secondhalf of this year because of rock-bottom mortgage interestrates, helped partly by the Fed’svery accommodative monetary policy.”
-Lawrence Yun, Chief Economist The National Association of REALTORS®
Buyers have the edge!

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