With so much negative sentiment in the media toward real estate, it’s kind of shocking to see someone saying that buying now is a no-brainer.
But CNN business correspondent Ali Velshi writes in a column for CNNMoney.com that it’s exactly that, for a couple of reasons.
For one, it’s a good point that even as home prices crept up slightly over the past year, interest rates fell, which has made homes more affordable. The cost of a home, at the U.S. median home price, is about $16,000 cheaper over the length of a loan than it was a year ago, according to the article. As rates rise – and they will over the next year – financing a home will cost more.
The other good point in the article is about whether a house is a good investment. As the author points out, that depends on what you mean, exactly, by investment. Because housing booms in the last 50 or 60 years seem to be anomalies over the long term, a 3-percent annual rate of appreciation is probably the norm that can be expected. Dollar-on-dollar returns could probably be better with other investments, though the risk might be higher.
But if enjoying your own home, getting the benefits that home ownership provides, is important to you, well then buying a home now could be as good an investment as you’ll make. Affordability plus home ownership benefits equals a good investment!