Is Now A Good Time To Buy?

By: Ki Gray

Have home prices hit rock bottom? Probably not in some areas and maybe not as a whole. Nonetheless, now could be the best time to buy a house. Even with the homebuyer’s tax credit due to expire at the end of the month, there are compelling reasons to buy a house in the current economy.

This recession made a good case for the renting over buying argument. But as the country tentatively enters the recovery phase, buying a house makes sense in many circumstances. The rent versus buy analysis has many considerations, including home prices, how long you planning on staying, the down payment, interest rates, and the future rise or fall of home values. Some of these are easy to evaluate and for others it would be nice to own a crystal ball.

According to a recent The New York Times articles, the consideration really is how are current home prices relative to pre-bubble prices. “(T)he situation is getting more complicated because the housing bust has been playing out unevenly across the country.” Some places, like San Francisco, home prices are still higher than they were before the housing bubble. Other places, like Las Vegas, prices are comparable to those of pre-boom years.

However, the purveyors of doom are warning that house prices are still falling. According to a recent Associated Press article, the government index of home prices shows a 0.2 percent decline in February, continuing a three month trend. That coupled with a stagnant national median home sales price is cause for concern. Some economists speculate that home prices could fall as much as another 20 percent.

Even with the bad numbers, home sales nationally are up 18 percent from the lowest point during the recession (AP). Home sales across the country rose in all regions, including 6 percent in the Northeast. For sale signs are coming up like spring flowers in neighborhoods across the country, which is a reassuring sight.

Short of owning that crystal ball, timing the housing market perfectly is part luck and part research. Knowing the local market and using an experienced real estate agent are the best ways to navigate the buying versus renting conundrum. Are home prices holding steady or rising? How are prices compared to five years ago? Two years ago? Fortunately, the Internet and real estate agents have a wealth of price information to evaluate.

Then there are the personal factors: How long do you plan to stay in the area? Can you afford to own a house in the neighborhood where you are renting? Do you like the rental enough to stay awhile longer? There is no crystal ball and there is probably not a “perfect” time to buy. The best a person can do is crunch the numbers and be realistic about both the hard numbers and the softer realities.

Read more: http://www.articlesnatch.com/Article/Is-Now-A-Good-Time-To-Buy-/1128596#ixzz0niI4oWeW
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Rates Mostly Unchanged This Week

30-year fixed-rate mortgage: Averaged 5.06 percent with an average 0.7 point for the week ending April 29, 2010, down slightly from last week when it averaged 5.07 percent. Last year at this time, the 30-year FRM averaged 4.78 percent.

The 15-year fixed-rate mortgage: Averaged 4.39 percent with an average 0.7 point, unchanged from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.48 percent.

Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 4.00 percent this week, with an average 0.6 point, down from last week when it averaged 4.03 percent. A year ago, the 5-year ARM averaged 4.80 percent.

One-year Treasury-indexed ARMs: Average 0.5 point, up from last week when it averaged 4.22 percent. At this time last year, the 1-year ARM averaged 4.77 percent.

Freddie Sayz

Mortgage rates on 30-year fixed loans have averaged about 5 percent over the first four months of this year, staying within a band of roughly a quarter percentage point and virtually matching 2009s annual average, said Frank Nothaft, Freddie Mac vice president and chief economist. These low rates have been helping to moderate house price declines over the course of the year.

Prices on existing homes showed a 12-month increase of 0.7 percent in February, which was the first annual increase since December 2006, according to the S&P/Case-Shiller® 20-city composite index [PDF]. In addition, nine cities experienced positive growth, matching the number in January. Further, the Census Bureaus Constant Quality price index showed that new home prices rose 2.5 percent in the first quarter on an annual basis.