Now is a great time to buy a home.

Time Magazine was very pessimistic in its recent cover piece that called into question the benefits of homeownership. The real facts are now is a great time to buy. Moreover, tomorrow will be a great time to own, as the fundamental strength of homeownership has not changed in 100 years.




Why is now a great time to buy?



Buyers can get a great deal. Prices are down 30 percent on average, and are at a level that makes sense for potential buyer’s income.

Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, buyer’s costs to own are down by at least a fifth from two years ago. Buyers can get their dream home using someone else’s money!

Tax savings are still prevalent. The combination of mortgage interest and other deduction can bring the cost of owning a home below the cost of renting a comparable residence.

It will be yours! The one benefit of owning that never changes is your ability to make it your own (remodel, landscaping, colors, etc.). How many landlords will let you do that?

Buyers can get better homes in this market. In some markets, it's simply the case that the nicest places are for sale and their prices are significantly less than 2-5 years ago.

Owning a home offers some inflation protection. Historically, appreciation over time outpaces inflation.

Buying a home is a capital investment. When the economy picks up, a buyer will benefit of the appreciation and be living in the home of their choice.

Buying a home is essentially forced savings. Each month a party of the buyer’s payment goes to equity.

The choice of inventory is incredible now. There are some 4 million homes available today -- about a year's supply. Now is the time for a buyer to get the home of their dreams.

Sooner or later the market will clear out the current inventory. The U.S. is expected to grow by another 100 million people in 40 years. These people have to live somewhere, so demand will eventually outpace supply.



Everything is cyclical. History shows that what goes down eventually comes back up due to improvements in the economy and changes in demographics. When investors and builders are buying – this is a great indicator for other buyers to jump in. Owning real estate is still the best investment anyone can make over a 2-5 year period.



Source: Wall Street Journal, Brett Arends (9/16/10)