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Time to Buy a House Now!

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We tend to make financial plans looking backward, learning the lessons of our most recent costly experiences. That’s why individuals don’t buy stocks at the “bottom”; they’re simply too scared. And in a similar scenario, that’s probably why people aren’t buying homes right now, despite still relatively low home prices and historically low finance rates.

It’s time to take a step back and take another look at the housing market. Of course, the decision to buy is a complex one, often depending on your own job situation and your current credit rating, as well as having enough savings for a down payment. But you can work your way through those issues — if you believe in the benefits. Here’s why you should consider buying now.

1. Rising Rents. Renting is the alternative to buying (unless you’re living in your parents’ basement). But you’ll find that the rental market has tightened considerably, pushing rents higher. Fewer apartment buildings have been constructed in recent years, and as the economy recovers, even condo owners who were caught in the crunch are demanding higher rents. In San Francisco, rental rates rose by 14.8 percent in the last 12 months. And even smaller markets like South Bend, Indiana, saw rents rise by 4 percent.

2. Low Mortgage Rates. According to Bankrate.com, the average rate on a 30-year fixed-rate mortgage is 3.89 percent — and it’s lower in some areas of the country. This is a terrific deal placed in historic context. Back in 1981, when people feared inflation, mortgage rates neared 15 percent!

3. Down Payments. Many people are intimidated by the widely publicized 20-percent down-payment requirement. They don’t realize that there are many federal programs designed to help first-time homebuyers, and even those who have lost their homes to foreclosure.

For example, Freddie Mac and Fannie Mae have loans available to first-time buyers with as little as 3-percent down payment, although they do require monthly PMI (mortgage insurance) payments. The FHA has similar programs that require 3.5 percent down and payment of mortgage insurance. (Credit scores for these programs must be at least 660.) And for veterans, the VA even has no-down-payment loans available for qualifying military members and veterans.

4. Rising Home Prices. If you buy now, five years into the “recovery,” you’re not getting the cheapest price on that home you want. But you’re certainly not overpaying either. Home prices rose by 8 percent in 2012, by 11 percent in 2013, and by 5 percent in 2014. But that’s off previous depressed levels. The latest Case-Schiller report shows home prices up by 5 percent year over year. Still, it’s not too late to get a good deal, as the economic recovery remains below-par.

5. Competition. The time to get into the market is when there is little competition pushing prices higher. That time is coming to an end. The most recent sales figures for existing homes rose by more than 6 percent in March, to a rate of over 5 million homes a year. And inventories of homes on the market are low, at a 4.6 month’s supply. But builders recently reported disappointing sales of new homes, which account for about 7 percent of the housing market. New-home sales slumped by 11 percent in March, from a seven-year high earlier this year. That’s where buyers who act now might get some good deals from builders.

Why wait? What’s the worst that could happen if you buy a home now? You’ve already seen it — believe me. The 2008 mortgage crisis wiped out $8 billion of home equity for Americans. It will take generations, if ever, before the banking system lets mortgages get that far out of hand again. Far more likely is the possibility that home prices will steadily climb as Americans get back to work and lead the global economy out of stagnation.

So don’t be blinded to the future by your past experiences. The American population will continue to grow and build families of all types, creating more demand for housing. Don’t view your home as a trading vehicle or a one-way-up investment. Instead, look at the home-ownership benefits that are mostly forgotten by today’s potential homebuyers — the chance to build equity (instead of throwing rent down the drain) and the opportunity to customize your own environment.

That’s what has always motivated Americans to own their own home. And it isn’t going to change in the long run. That’s the Savage Truth.


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Drones have necessitated formidable technological innovations that help in many different procedures of societies. They refer to aircraft that shift at supersonic rates that can cover a large spot, dependant upon their callings.cheap custom Drones happen to be during the past accustomed to safeguard nations towards terrorists, industry products and services, and deal with boundary things. But, with appearing entails useful units in operations, agencies have were able to develop innovative drones that can do many different solutions. A lot of establishments and nations around the world have adopted drones on their daily duties, due to their mobility and comfort (Oliver, 2013).

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Investment capital Discipline

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Pluses and minuses of Range Training

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It’s been a long and uneven road to revival for the housing market. But things have been heating up for the last few years.

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Home prices took off in 2012 and went on a tear in 2013. And while the double-digit growth has slowed somewhat, prices are still heading higher.

In February, prices rose 4.2% from the year prior, according to the S&P/Case-Shiller U.S. National Home Index.

And some local markets are on fire, with bidding wars and offers above asking price becoming common. In San Francisco, 74% of homes listed earlier this year, sold within two months of hitting the market, a recent Trulia report showed. The median asking price of the City by the Bay was $1,099,000. Several other areas in California, along with Seattle and Salt Lake City are experiencing similar real estate booms, the report found.

Home prices in Denver and Dallas have exceeded the levels hit during the housing boom, according to S&P/Case-Shiller.

If prices continue to outpace inflation and income in these areas, that can eventually become a problem.

“Price increases — even in the most desirable places — can’t continue to outstrip income growth forever,” said Keith Gumbinger, vice president of HSH.com. “At some point, no one will be able to afford a home.”

Here’s what’s driving prices higher:

Homeowners aren’t selling: Current homeowners list their home to either trade up or downsize, opening up inventory for first-time buyers to come in. One can’t happen without the other.

“The whole train has to move at the same time,” said Gumbinger.

Calculate: Was my home a good investment?

But current homeowners aren’t flooding the market with “For Sale” signs. Some are worried they won’t be able to find a new house or they’re still waiting to recoup their home’s value lost in the crash.

“Homeowners who would be considering selling could still be underwater or still in too low of an equity position,” said Gumbinger.

Existing home sales have increased for seven consecutive months, but David Crowe, chief economist at the National Association of Home Builders, said it’s not enough. “Without additional inventory on the existing side, the first-time homebuyer is boxed out.”

Builders aren’t building: Builders have been cautious during the recovery, since they need to know homeowners will upgrade to the houses they build, said Crowe.

According to Crowe, a normal housing market has 1.6 million new single and multi-family homes built annually. Last year, the market hit a million, but single-family homes made up just 700,000, when it’s typically a little more than a million.

Lenders still aren’t lending: Strict lending practices have made it harder for buyers to secure a mortgage since the bubble burst in 2008. And while banks have loosened up a little recently, lending is still significantly tighter than it was before the housing crash.

That’s not necessarily a bad thing, but Crowe thinks standards are still a little too tight. “Underwriting standards have been tightened up beyond what is necessary,” said Crowe. “It’s an overreaction to clearly loose standards in the middle of the [last] decade.”

Related: Home buyers in these markets have the upper hand

Tight inventory and rising prices can be potential warning signs of a bubble forming, but experts say it’s too early to tell.

“It’s not obvious yet,” said economist Robert Shiller, who helped create the S&P/Case-Shiller Home Price Index, on a potential bubble.

If there is one, it’s a different type of bubble than the one in 2008. While supply and demand helped inflate that bubble, the demand was enhanced by loose mortgage lending practices that sometimes pushed buyers to take out loans they couldn’t afford.

“That bubble was fostered by a finance-related push,” explained Gumbinger.

Today’s rising prices are fueled by actual market forces, backed up by real money. “You don’t see all those things that would create unsustainable demand,” he said. “It’s a better qualified marketplace.”

Any potential bubbles at this point would be limited to specific markets, he added. “There are marketplaces that are beholden to certain industries and if those change, that could mean local changes to that market. At the end of the day, all real estate is local.”

Are you a homebuyer in a seller’s market facing stiff competition finding your dream home? Are bidding wars common in your area? Tell us about your house hunt horror story and you could be featured in an upcoming story on CNNMoney.