Warren Buffett recently stated that home ownership makes sense for most Americans. I have to agree, it is a good time to invest in real estate. After all, we have devalued real estate, we have bargain interest rates and given the number of closed transactions, most people are on the side lines.
Lower prices + bargain interest rates = a great time to invest in real estate. WB
When we look at LP (lower prices) matched up with BIR (bargain interest rates), it equates to the most affordable time to buy real estate since 1970. 1970! Some of us remember that the Kansas City Chiefs beat the Minnesota Vikings, 23-7 in the New Orleans Superbowl and Col Kadhaffi became premier of Libya. That happened in 1970.
Take a look at the graph on Housing Affordability. The definition of Housing Affordability is the percentage of a median family's income required to make mortgage payments (principal and interest) on a median priced home. Unprecedented interest rates, low mortgage rates as well as the first-time buyer tax credit continue to contribute to improving affordability conditions.
Many of you may be saying, "Well, I already bought a house". My suggestion is that you may want to look hard at buying a second or even a third house given the values and interest rates and let a stranger help in your investment. There is a good chance that a 15 year note's payment may very well be covered by the income paid by a renter. In that case, your rental property could very well be paid off in 15 years. Imagine if you purchased five $200,000 homes today and were sitting on no debt in a very short time. Wouldn't retirement look a whole lot different?