I have a niece that is starting to investigate buying her first home. She and her husband have been renting - and saving - for years. She was asking for advice on home inspections when she gets that far and I thought her reply was really interesting.
"Sounds like we are on the same page about the market. A hard place to find any company, I notice! We are in no rush. We have been waiting for a buyers' market this long and are not going to rush it now. Portland is still 20% above the upper end of the affordability index. Dan and I feel the same way about the "Help for Homeowners" and the prospect (which most economists seem to see as inevitable) of changing the principle. How unfair to people like us who backed away responsibly 3 years ago and continued to rent this whole time! We just want to get a start on the financing end of things, we are hearing horror stories about it taking people 6 months to get approved for a mortgage. And it is time to start getting educated, so we are ready to make decisions when the market gets where we want to jump in. Also, if we find the right short sale or foreclosed home, we figure we could get a price well below the median for the area, which would put us back in the affordability index ahead of the rest of the neighborhood (we have had our eyes on one in particular, it has been on the market almost 2 years now. We just wonder how long it will be before the bank is interested in making deals.) But hey, as Dan just commented over my shoulder, when BofA and Citibank are on the brink of nationalization, all bets are off. Who knows where this is going."
Likewise, Megan McArdle of the Atlantic Monthly wrote:
It occurs to me that while there is a big conservative/liberal split on the Obama foreclosure plan, there may be a bigger divide between renters and owners. I think that most of the people supporting the mortgage plan really do feel like falling home prices is an obvious catastrophe. I also think that most of them own homes. Because, of course, if prices stay high, where is the money coming from to support them? Well, from people like me, who do not currently have a home to sell, but would like to acquire one in the not-terribly distant future. Keeping people and banks from selling at a loss requires that I buy a house which is overpriced.
You can read her whole arguement at http://meganmcardle.theatlantic.com/archives/2009/02/the_renterowner_divide.php
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