It’s Time To Buy That House (In Philadelphia)
It’s Time To Buy That House (In Philadelphia)
Philadelphia Real Estate Blog - Price to Rent Ratio
What a great follow up to my post about how Philadelphia home values have held value or increased in value since 2005. Nationally, US home prices have lost nearly 1/3 of their value and would be buyers are opting to rent or wait. According to the Wall Street Journal article, “It’s Time To Buy That House”, two important metrics suggest now is a great time to purchase a home to live in or for investment purposes.
“First, the nation’s ratio of house prices to yearly rents is nearly restored to its pre-bubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.”
“But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren’t hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or “points.”) The latest rate is still less than half the average since 1971.”
Home purchase affordability is literally at an all time high. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index’s historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. But do remember that just because you can afford to do something doesn’t necessarily mean it’s a good idea. Lending criteria has tightened but effectively the standards now are closer to what they should have been all along. If you don’t have good credit, stable income, low debt and a healthy mortgage down payment then maybe renting is the best option.
To search Philadelphia Real Estate listings for condos, homes and apartments click here.
Blog post compliments of CenterCityTeam’s Philadelphia Real Estate Blog
Frank L. DeFazio, Esquire
Prudential Fox & Roach Realtors – Society Hill
530 Walnut Street, Suite 260
Philadelphia, PA 19106
215.521.1623 Direct
610.636.4364 Cellular
888.308.1148 Fax
[email protected]
www.CenterCityTeam.com
