One of the most compelling posts I read supporting the position that this is the best time in history to buy a home was posted the end of January by Dr. Steve Sjuggerud. It was based on cold, hard facts.
First of all, mortgage rates are the lowest they have been in history. We have become so accustomed to low interest rates that it is easy to forget how significant it is. The chart below from Global Financial Data dramatically shows how low mortgage rates really are... lower than in more than 100 years!
When the Feds met this week they said they planned to keep interest rates low for an extended period of time... but nothing lasts forever.
The last time mortgage rates were even close to this low was after WWII, when home prices also bottomed out... hmmm, sound familiar? Guess what followed? Both home prices and interest rates went up.
The other piece of the puzzle is housing affordability, which takes into account not only housing prices and mortgage interest rates, but also income.
As you can see from this historical chart from the Minneapolis Area Association of Realtors, housing affordability has been climbing and peaked at the beginning of this year. It's hard to say whether or not it will go up again, but we could be close to the peak... even could be on the way down.
Regardless of whether or not we are at the absolute lowest price and interest rate or at the highest affordability, buyers are at one of the best times in history to buy a house. Congratulations if you are one of the lucky ones to be buying at this time!
Sharlene Hensrud, RE/MAX Results - Email - Twin Cities Realtor