The American Dream Lives: Home-Ownership Proves Its Worth
Despite all the pain created by the housing market collapse, the long-term case for home-ownership appears to only be getting stronger.
According to the Wall St. Journal:
Despite all the gloom, however, there are growing indications that it is a good time to buy. Mortgage rates, which fell to 4.55% for the week ending June 2, according to Freddie Mac, are near 50-year lows. Homes have become more affordable than they have been in years: According to Moody’s Analytics, the ratio of home prices to income is now 20.9% lower than the 15-year average through 2010, and 12.5% lower than the 1989-2004 average. A historic glut of homes, meanwhile, has created a buyer’s market: There were about 15 million vacant homes in the U.S. last year.
But the long-term benefits of home ownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes—a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with.
At Texas Lending, our rock bottom Texas home loan interest rates make now a great time to buy. Similarly, our home refinance loan rates are anchored to the floor. But the home-buying environment just isn’t going to get much more ripe than it is right now.
The Wall St. Journal also notes that once the main factor holding markets back — the glut of foreclosures created by the crisis — clears up, other factors like prices and employment should also quickly return back to normal. Currently, signs confidently point to 2013 for the end of the foreclosure mess. Prices could begin to tick up before then.
The numbers needed for a more robust recovery are slowly starting to align here in Dallas more quickly. According to the Dallas Morning News, for example, home foreclosures have seen a pretty big drop these past few months:
Home foreclosure filings in North Texas are down for the fourth consecutive month. The number of Dallas-Fort Worth homes threatened with forced sale by lenders is 6 percent lower for June than a year earlier, according to Foreclosure Listing Service. And foreclosure postings are down 7 percent so far this year compared with the first six months of 2010.
“For the first time in 11 years, foreclosure posting activity for mid-year declined compared to the previous year,” said George Roddy, president of the Addison-based foreclosure tracking firm, in the company’s latest report. The biggest decline in June foreclosure filings was in Dallas County, where postings were 10 percent lower than a year ago.
And when the recovery finally shakes off its sluggishness for good, both interest rates and home prices will increase. That’s good news for the broader economy, but it means the window of this historic buyer’s market will close. Similarly, the chance to refinance your home at at historically low refinance rates will also slip away.
So if you’re in a sound position to consider buying a home, contact one of our Texas home loan specialists to learn more about your options. Opportunities abound out there in the Texas housing market, and we’re eager to help potential homeowners find them.