History says, now is the time to buy a home.
We have written many times over the last 48 months that now is the time to buy a home. Now the case can be made, if you own 1, buy 2 more too, such is the opportunity.
Of course what we have been saying has been correct all along. If you had bought a home in Madison Wi over the last 2 years you could not go wrong.
But now the proof is mounting that this elongated opportunity is closing fast.
Let’s start with home sales, nationally they are trending up to 5.28 million from a low of 3.84 back just 6 months ago. (annualized figure)
So Sales are up. so do prices!
Let’s look at affordability!
Homes are more affordable that they have ever been, based on price and interest rates against household earnings. Household income to home price fell to 13% in 2010.
Let’s look at interest rates:
They have gone up almost 1% from all time lows just 3 months ago. Hovering just below 5% for a 30 year, and predictions they will be at 5.6% later in the year. Every 1% hike in rates is like adding 10% to the price of a home. How long before we get to a historical average of 8.9%
It is likely, due to increased activity, prices will go up soon, and higher interest rates will make home less affordable.
I ask you: Can you hear me now?