August 22, 2012 3:06 am
The median price of a single-family home as of June 2012, the latest month for which figures are available, was $190,100 – down significantly from the market peak of $230,900 in June of 2006, according to NAR. Interest rates for a 30-year mortgage are hovering below 3.6 percent, according to Freddie Mac. The all-time low occurred at the end of July, when the rate dropped to 3.49 percent.
Let’s do the math: If a buyer financed 80 percent of the median price - $152,080 – the monthly nut would be $691. That beats rent any day of the week.
Another benefit of homeownership is tax write-offs. Mortgage payments include interest, which is tax-deductible. Renters can’t deduct a penny out of their monthly payment.
REALTORS® report a healthy supply of homes on the market but say that number will start to rise as prices continue to climb. That’s because homeowners who want to sell have been waiting patiently for the real estate rebound so they can get their asking price, or close to it. As home prices rise, so do listings.
However, excess inventory should be cleaned out by the end of 2013, predicts the institutional-analyst firm Ned Davis Research. Then, housing starts will be on the rise.
All of this is good news for the real estate industry at large and to homebuyers with decent jobs and the ability to obtain a loan. While there always will be risks with homeownership, the benefits far outweigh them.
Source: Waterfront Properties and Club Communities
Published with permission from RISMedia.