5 Reasons to Buy a House Today

Money House on BlueprintSteve Harney has posted about the importance of homeownership often on this blog. He sees it as part of the American Dream and feels that there is a value in owning your own home that far transcends any economic advantages. He has done a great job of making his case. However, we want to look at just the financial advantages of homeownership in today’s post.

It may seem an odd time in real estate to be making the case for homeownership as an investment. We all know that real estate values in many parts of the country have dropped dramatically over the last four years. Yet, with that being the case, there is still tremendous evidence that buying a home today makes perfect sense … FINANCIALLY!

1. Buying May Be Cheaper Than Renting

Home values are back to 2003 prices in many parts of the country. Interest rates are at all time lows. It may just make economic sense to buy now because your housing expense will be less.

Professor Case, in the article mentioned above, states:

Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833. In addition, the down payment would be $42,600 instead of $60,000… housing has perhaps never been a better bargain.

In many parts of the country it makes sense to take advantage of the current market and become a buyer at those numbers. A formula to determine whether to buy or rent used by Andres Carbacho-Burgos, a Moody’s economist, was explained in the Palm Beach Post last week:…

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