Depending on whom you ask, it's always either (a) It's a great time to buy a house, or (b) It's never a good time, because a house is a lousy investment.
While most people say they want to buy a house as an investment, they really don't see it that way. Lots of first-time buyers say something like, "It's better to put that monthly payment into a house than give it all to some landlord."
But an investment is something like, say, pork belly futures, and most people know it. You can't live in a pork belly future. Really, lots of people want to own a house because they just do. They like having something that's theirs.
For those folks, maybe now is a pretty good time to buy.
It's true house prices have gone up, but they're still hovering around 2004 levels. And mortgage interest rates (as, ahem, a previous post predicted) aren't much north of 4%. Even though The Captain believes we're in a low-rate environment for a while, that's still pretty low by historical standards.
But plan on being there a while. The Captain continues to think prices won't be moving up anytime soon. The recent uptick in prices induced more sellers to put their homes on the market. But too many are still underwater, according to Zillow, and that doesn't include owners with flatlined-to-minimal equity. Prices won't be going up until the national economy improves, something which has been right around the corner for several years and will be for several more.
And the recent upsurge in home buying has come from investors paying cash for distressed or low-priced properties and pent-up demand from traditional buyers. Investor purchases are already falling off, as are traditional ones. Pending home sales continue their slide.
The point being, I guess, that the home-as-investment part isn't looking great. The place to live part is, though.
As usually, if you have any questions for The Captain, fire away.
And, agree or disagree, I'd love to hear what you think!