Some people say we shouldn’t encourage home ownership because some people shouldn’t own homes. That belief misrepresents reality. I think we can agree that not everyone who wants to buy is financially ready. Many people are ready and should be encouraged to buy their own home. The median net worth of home owning families is more than $200,000 compared with about $5,000 for families who rent, according to the most recent data available from the Federal Reserve. People that work hard to buy their first home and begin building equity can, in the long run, be more self-reliant that those who don’t take that step.
In addition the interest rates, in the 4% range, are at an historical low (see previous post). It is less expensive to buy than it is to rent a home today. Speaking only about the local market here in Seattle now the smart investor/home buyers have returned to the market. There have been more cash sales than any time in my long career which means people with money have sat on the sidelines as the market was in turmoil and waited until the market bottomed out. Now they have returned and are investing cash. Check out the local housing market stats and trends on the 'Local RE Stats' tab at the top of this blog page.
The obvious question is:
If someone is renting, has at least 3.5% of the purchase price for a down payment, has decent credit, and is employed then why wouldn't someone buy a home of their own with such favorable market conditions? What would be a reason not to buy in this market?
No comments:
Post a Comment