Investment Recommendations Home Affordability: Myth or Reality?
For many young couples, the idea of investment in their own house just like their parents is an attractive idea, but it’s not very realistic. A recent poll conducted by the Associated Press and America On Line Real Estate showed that 80 percent of respondents believe that it is hard for first-time buyers to afford a home. A majority of those polled – 59 percent – also said that they believe it is harder to buy a home now than it was five years ago.
Taking a closer look at the poll reveals that young adults and those that classify themselves as minorities consider the affordability of homes a bigger difficulty now than five years ago, compared to those over the age of 50 and those that identify themselves as white.
Broken down by region, almost 70 percent of those living in the western United States and almost 65 percent of those living in the North-eastern US say that it’s harder to buy now than five years ago, compared to only 54 percent of those resident in the South and 51 percent of those living in the Midwest.
The poll also found that almost half of those surveyed thought that the real estate market in their home area was overpriced. So now is the time to buy, at investment income we always do the opposite to the majority to be successful in investing.
A recent report by the census bureau seems to back up the findings of the AP/AOL survey. The census report found that approximately one third of all homeowners in the US that have mortgages spent at least 30 percent of their income on housing and housing related costs. It’s widely considered excessive if your housing costs make up more than one third of your income. The census took things like mortgage payments, insurance and utilities and taxes into account. However, home ownership is investment in an appreciating asset, one on which, over time, you can make money. A better investment than in other daily expenses; taking money out of your pocket.
The biggest reason for this lack of faith in new home ownership can be directly attributed to the recent housing boom followed by decreases in mortgage rates linked with dampened optimism about the economy. These have created great buying for the astute investor.
Drops in housing values have shaken peoples confidence in the viability of the housing market, but they aren’t making any more land and it is a solid long-term investment strategy.
While buying your first home is never easy, things may be a bit harder now than they have ever been. But bargains so still exist, and if you’re patient, a first home can still be yours. Stressed sellers lead to bargain buys. A friend is currently purchasing a property at $25000 under market value. The current owners live on the other side of the country, and they have a poor managing agent and horror tenants provoking complaints from all the neighbors. They want out at any price. This will be an investment rental property and will be cash flow positive from day one. For first home owners this could be purchased for the same weekly payments as current rental prices.
Now is a great time to invest in Real Estate for more information visit investing.
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