Are you a college student? Consider buying a home near campus and rent out rooms to other students. Your renters will often pay your mortgage!

College students are drowning in debt to finance their education and you encourage buying a house while in school!  That has to be the worst advice I've every read on Active Rain.

In case you haven't kept up with the market, subprime is in a meltdown.  Are you suggesting they borrow the downstroke for the loan from the parents?

That graph is pretty meaningless.  It doesn't show the respective age categories of net worth.  Most people own a home because they have a family, which means they are generally in their 30's and older.  You can be a young engineer making $100K/year, but only have $10K net worth because you just graduated school.  You can be a 50 year-old construction worker making $30K/year, but you're married and have a lot of time under your belt, so your net worth is $200K.

The only apples-to-apples comparison is to state the income, marital status and age.  THEN we can see if home ownership is a great deal vs. renting.

As somebody in the business, can you REALLY suggest buying in after one of the largest run ups in history?  If you've already bought in the recent (2-3 years) history, hang on for all you're worth.  In the long run it DOES work out.  But for new buyers, it makes no sense.  My wife and I have been looking at new homes, and it would cost us 20% down plus twice what we pay in rent.  Historically, housing prices rise at the rate of inflation (yes, even on the coasts) and so even if you buy into the idea that housing WON'T go down where you live, it still has to cost less to rent than to buy to make sense putting 20% down given that you can do better than current inflation rates with short term CDs.  My wife and I are 30 and 32, worth a collective 400K in assets, and wouldn't buy a house if you held a gun to our heads in the current market.  Median and average house prices are 6-9 times media and average incomes in the bay area (california).  Historically in 'expensive' markets, it's 3.5-4 times median and average incomes.  Ergo, it's a bubble.  People bought into the hype when interest rates dropped, and ARMS and relaxed lending standards let people who had no business committing to a debt 6-10 times their salary buy in with the idea that when they couldn't repay, they could still sell for a profit.  Well... that time is over.  It's not going to work anymore.  My wife and I will continue to horde our cash until the inevitable crash occurs, and THEN will buy when prices are closer to a more maintainable level.  We make almost twice the median income in some of the best 'upper middle class' areas, and yet even with a 20+% down payment can't buy a house without committing 50% of our income to mortages, yet IN THE VERY SAME AREA we can RENT an a Single Family House for 25% of our income?  It makes exactly zero sense to buy now.  Those 'net worths' you are quoting exist SOLELY from inflated housing prices, and when they refuse to rise, or even sink over the next 5-10 years, you'll find that prudent renters will shellac buyers in today's market.  Claiming otherwise shows a lack of economic sense.  Spending 2 weeks learning to be a Realtor(R) not only in no way makes you qualified to give investment advice about buying a home, it in fact makes you LESS qualified, as you now have a stake in making people think "Now is a great time to buy or sell."  If you suggested your potential customers do research on buying vs. renting, and laid out the costs and break even points, your article would hold merit.  As it stands if you can't be sure you're going to be in a house for over 10 years, you're likely going to LOSE money if you're in a bubble market.  Only people who are 1) VERY secure in their job, 2) VERY happy with the neighborhood, and 3) VERY happy with the house in particular should be buying right now.  Over 50% of people move in less than 5 years, and now that the market has doubled in 5 years, when historically it ought to be up 3-5% a year (about 15-20% in five years) and sales have flattened across the nation, you're looking at 5-10 years of stagnation.  It happened to Japan (including, if not EVEN WORSE in Tokyo), so it can happen to any market.

I'm not a genius, but it doesn't take a genius to examine the underlying information and realize that we're at the top of a precipice, and people buying now out of fear of being 'left out of the market' are going to be hurt.  Please, make sure your clients are VERY secure in their intentions before buying a house in this market, if only for their sakes.  It's going to be a very ugly few years as the subrpime and alt-A mortgage lenders dry up, and anybody who bought too much house or paid way to much for very little house are going to have a very rough time.

 If you are very financially secure, and love the house and neighborhood, however, you can get the house you want now.  Just make sure you have a good reason, and good foundation, before doing so and in 30 years you'll be as happy as those of us who waited 5 years to buy.  If you're frantic because you feel you're going to get 'priced out forever', take a deep breath and ask youself, "Just who the heck is going to BUY these overpriced starter homes if _I_ can't?"  If you're priced out of the market and you have 20% down, rest easy knowing the the current market insanity will collapse back to normal within 5-10 years at most, and buy then.  If you DON'T have 20% down, DO NOT let people talk you into betting your entire life on real estate perpetually appreciating.  Rent cheap, save for that 20% down, and buy when you know you can afford it, and that mortgage will let you sleep easy at night, not cause insomnia.

Teri - you got overtaken by the 'real estate bubble' zealots.  In some markets, for financially WISE AND ASTUTE individuals, watching the difference between rents and mortgage payments FOR THE EXACT SAME TYPE OF DWELLING UNIT and buying just as the rents are starting to rise can be the ideal time.  The thing is, most people rent smaller and buy bigger, therefore it is NOT an apples to apples comparison.

Right now in our market it is cheaper to rent than own, if you rent the exact same type of dwelling unit.  But, the rental market is tight and rents are starting to jump.  Although we had a huge appreciating year in 2005 and a solid one in 2006, we're on track for another solid year.  In our market, we never depreciate.  Who actually knows this?  99% of the REALTORS(R) in our area don't even know this.  We appreciate, then pause, appreciate, then pause.  

And, if you are in one of the jump and drop markets, such as CA, if you had purchased at the height of the last market and held on, you would be sitting pretty.  

These zealots are trying to do the same 'time the market' philosophy that day traders insist makes money, you know the ones where less than 1% of all day traders actually make 6 figures a year?  They are speculating market timing, not buy and hold.  Buy and hold beats out in real estate over market timing (it does in the stock market as well).

Funny part is, they aren't taking into account the movement of interest rates and the value of the dollar in future years.

Let's cut to the chase......

This is just one more feeble attempt to get buyers off the sidelines to generate commissions and has nothing to do with sound financial advice.  The marvelous thing about stats is they can be manipulated to support almost any point of view.

Spin doctors for the real estate industry are just as idiotic as "bubble zealots".  Just so you know, I'm a buyer who's researching the market and making good business decisions.  Now is NOT a great day to buy.....maybe latter this year or the next.

I do agree all real estate is LOCAL....locally, foreclosures are on the rise....locally, subprime is in a meltdown....locally, inventory is a record levels.....locally, buyers have not participated in the "Superbowl Surge" as was predicted.  Within a couple of weeks, when Spring is officially here, there'll be another push to try and jumpstart the industry, and I agree, let's compare notes down the road. 

The most entertaining descriptor is the new definition of price decline.....it's now a "pause".....and ranks right up there with "negative equity".    ROFL