Home prices have hit bottom in most areas of the country, but they’re not like a rubber ball. Sellers can’t expect much of a bounce.
Sea Isle City beachfront and bayfront townhouses on sale.
At the Center for Economic Policy Research, in Washington D.C., analysts are predicting that the pricing arrow is pointing up, but not very far. There are still too many foreclosed homes on the market.
So, what did the center’s co-director do? He bought a house. He doesn’t expect its value to rise much in the foreseeable future. But the home had features he loved. The price was affordable, and the loan’s interest rate was below 5 percent.
This set of circumstances encouraged him to take the plunge and acquire a place his family could call home for many years to come.
Today’s reasonable prices can make a good case for buying rather than renting, say advisors quoted in USA Today. While many first-timers are leery of making a long-term contract, here is a way you could determine if the move is a wise one.
* Divide the price of a home you are considering by the annual rent for a comparable place. If the number falls below 15, buying starts to look like a good idea.
* Consider whether you will stay in the home long enough to make the purchase worthwhile. Closing costs are high. If you intend to sell the house and buy another in two or three years, you could take a loss.
* Analysts say it’s reasonable to buy a home only if you plan to stay in it for five to seven years.