Is this really a good time to buy or own a home?
The current period is likely to be viewed as a golden opportunity to buy a home.
Mortgage interest rates are hovering around record lows, home prices have declined and actually over-corrected in many areas, inventory is plentiful and sellers are motivated.
Home ownership continues to be a sound investment over the long-term, providing shelter and a higher quality of life where most owners feel safe and secure. It is the primary means for most households to accumulate wealth, providing resources for a more comfortable retirement.
In times of need, the accumulated equity in a home offers financial flexibility – it can be tapped for major expenses such as college education, major medical bills, or adding to the home to accommodate a growing family. It should never be used for simple consumption.
In a normal market, most families accumulate enough equity to trade-up to a larger home in three to five years, although that is longer in the current environment and conditions vary widely around the country.
As many as 85 percent of recent homebuyers see their home as a good investment and nearly half think that investment is better than stocks. Even with the turmoil created by the housing boom and bust, this indicates the long-term view of home ownership as a fundamental goal and value remains sound.
In fact, according to the 2010 NAR Profile of Home Buyers and Sellers, the single biggest reason most people buy a home – including 53 percent of first-time buyers – is the simple desire to own a home of their own.
When approaching retirement after a long period of home ownership, most owners have accumulated large amounts of equity, which permit them to trade down to a smaller and easier to maintain home, generally with an all-cash transaction. Most renters could never dream of such options; a mortgage might last 30 years, but renting is forever.
In short, achieving sustainable home ownership truly is the greatest part of the American dream.
Jennifer Grayson is president of the Greater Chattanooga Association of Realtors