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Health & Fitness

Patch Blog: Is Now a Good Time to Buy?

Why now is a good time to buy a house.

Considering that mortgage interest rates are at their lowest level in 30 years, now might be the right time to make that American dream of homeownership a reality.

While the headlines are still scary to most people, the good news is that real estate, if done right, is still one of the best ways to build personal wealth. When you hear the numbers about distressed homeowners and foreclosure statistics, it's natural to feel a little skeptical about buying a home today. If you look at things from the other side of the coin, however, the fact is that 89% of mortgages are current as of the first quarter of 2011 according to a report by the U.S. Comptroller's Office.  While there aren't more recent statistics, it makes sense that with banks agreeing to loan modifications and taking steps to help people stay in their homes, the number of owners being current on their loans is probably even higher today.

Think back and remember when people bought homes to live in them. A normal middle-class family moved into a home and stayed there. The long-term mortgages got paid off, and when homeowners retired, they lived rent-free and left their homes to their children. Things changed in the 2000's when loans became available to anyone, even if they weren't qualified to buy a home. Competition for houses got so fierce, that buyers found themselves, in some cases, making offers at $50,000 to $70,000 or more over the asking price. Multiple offers caused such a frenzy, that buyers removed important contingencies and became focused on "being the winner," even if it meant they overpaid for their new house. 100% financing and home equity lines turned homes into ATM's, and when the mortgage industry imploded, people found themselves the proud owners of homes that weren't worth what they paid for them. That was the wrong way to buy real estate!

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Today, home prices have normalized and housing affordability is down to levels that were in place before the housing bubble.  Lower prices combined with low interest rates makes this the best opportunity for qualified buyers to find a bargain. Renters, especially, should research their options on homeownership and see how buying brings with it tax benefits that make sense.  There's no better time than now to make your dreams a reality!  Who knows when prices and rates will be this low again?

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