Posted by Admin . on Monday, February 27th, 2012 at 3:13pm.

“Affordability is at an all-time high” and “historically low interest rates” are not just pitches to get you to naively jump into the housing market.

But while they may be true in general, don’t start house shopping until you know if they are true for you and the area in which you live or are looking to buy a house in.

Affordability is calculated by a ratio of median household income to median home prices for any given area, the Realty Times reports.

According to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), this record level is around 73 percent of all new and existing homes. In comparison, until recent years, it was unusual to see the HOI go above 60 percent, Realty Times reports.

“With interest rates at historically low levels and markets across the country beginning to improve, homeownership is within reach of more households than it has been for nearly two decades,” Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev., tells the Realty Times. “However, tough economic conditions –particularly in markets that experienced major changes in house prices and production — as well as extremely tight credit conditions confronting home buyers and builders continue to remain significant obstacles to many potential home sales.”

Potential home buyers should ask their local real estate agent what home prices are like in their area and compare them to their own family’s income. They may find that they are in the position to purchase a larger home or move up.

For buyers with cash down payments, steady incomes and good credit cards, the market is full of opportunities. Buyers can buy more home for less money and pay less interest over the life of the loan thanks to incredibly low interest rates, according to Realty Times.

The magazine confirms that interest rates have never been as low – less than 4.0 percent for buyers with good credit scores (at least 720), though other good rates or deals are available to those with lower scores.

And it doesn’t hurt that there are fewer home shoppers in the market, which means buyers have more leverage at the negotiating table. Sellers are willing to make more concessions and many are motivated to sell, especially if their home has been lingering on the market, Realty Times reports.

The excess of foreclosed and short-sale homes on the market offer even more opportunities to buy a home at a bargain price, making this an ideal time to purchase real estate.

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