As the graph below points out, the rent vs. buy equation needs to also take into account that
rents are subject to increase every year, and mortgage payments remain fixed throughout the life of the loan*. Another key factor in the affordability picture is the federal tax deductibility of mortgage interest, which amounts to an annual savings of thousands of dollars for the average homeowner.Recent Decline in Home Sales: Perfectly Predictable
While many in the media have run with the temptation to attribute the summer sales lull to a deteriorating housing market, economists are looking at the big picture and pointing to an inevitable outcome of the expiration of the $8,000 first-time home buyer tax credit, which went into effect in January of 2009 and expired April 30, 2010.
Throughout 2009, the pace of home sales picked up as buyers and real estate agents latched onto the program, topping 5 million in July of 2009 and then peaking at 6.5 million in November of 2009, the month that the program was originally slated to expire. The expiration of the tax credit on April 30, 2010 led to a sharp decline in May sales and an even more significant drop in June and July.
Following July’s 27 percent drop in sales, the National Association of REALTORS® reports that pending home sales for August are up 5.2 percent.
Vive la lull!
Back in the heyday when housing was hot, properties were snatched up the second they hit the market and prices were going up and up and up, it was an “exciting” time to buy a home. And then, the bubble burst, the market cooled and housing went from speculative to safe again, from volatile to sensible, from a place to flip to a place to live.
Far better options by any measure for the smart buyer who knows how to recognize an opportunity when they see one!
This is a prime time to buy a home!
Mark Fuller is a leading real estate professional specializing in Luxury Homes In Houston Texas.