First Time Buyers: Has the Moment Arrived?

There was a good article in the "Your Money" section of The New York Times yesterday, titled "Maybe It's Time to Buy That First House."

http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?_r=1&ei=5070&emc=eta1

A well-balanced piece, it has great references within the article to (1) where to check your credit rating and (2) a study about rents versus housing prices and bubble markets that may not see positive equity as far out as 2012.

It has been encouraging in this market to see prices coming into a range where it may be possible for people who have been priced out to buy into the Bainbridge market. As I write, there are about 50 single family homes under $500,000 on the island, and plenty of choices under $400,000. With a 20% down payment this translates to a conforming loan. Rates are now around 5% for a 30-year fixed mortgage. Condominiums and townhomes are plentiful. A buyer who is pre-approved with no house to sell is really in the driver's seat.

On the other side of things, the study that the Times links to titled "The Changing Prospects for Building Home Equity". The Seattle-Tacoma-Bellevue metropolitan area is one of the 100 areas analyzed in the study that the study authors predict will have continued equity decline through 2012.

Keeping in mind this is one study, is it a good time to buy? Depends on your perspective. First-time home buyers (and other renters) need to ask themselves a few questions: How long do I plan to own my home? How much tax benefit will I receive from owning versus renting? How will my housing asset perform compared to other assets? What non-economic benefits do I receive from owning instead of renting?

I am always happy to discuss these posts over the phone, by email, through blog comments or in person. I hope you find my posts informative!