While it may be difficult-verging-on-impossible to ignore the chorus of voices urging, "Buy now, before it's too late," one distinction to keep in mind is that while market conditions certainly make this a great time to get a low-interest loan, that doesn't necessarily translate to it being a great time to buy, as these counterarguments demonstrate:
*There's (Almost) Nothing Good Out There
As we all know, housing prices have fallen steadily over the past few years. Great news for buyers, right? Yeah, except that it also means fewer sellers, as those who can afford to are holding onto their homes in the hopes of property values picking back up eventually. The result is a smaller pool of desirable listings and stiff competition for the ones that are listed.
*I Don't Know Where I Wanna Be in 5 Years //Trapped in the Closet?
There are significant transaction costs involved in buying and selling a house. Amounts vary, but are typically steep enough to give the rambling types serious pause. According to Dean Baker, co-director at the Center for Economic and Policy Research, home buyers need to nest for at least four to five years in order to reasonably amortize the cost of one move.
?Say you've plugged the numbers for your hypothetical home purchase into one of those online mortgage calculators, and the resulting monthly mortgage payment estimate is right around what you currently pay for rent. That’s all well and good, but to get a more accurate picture, you’ll need to take other expenses, such as property taxes, maintenance costs, and utilities into account.
* Price-to-Rent Ratio?
One standard measure of whether it makes more sense to buy or rent is the price-to-rent ratio, wherein the price of the home is divided by the total cost of rent for one year. The general rule of thumb is to buy when the ratio is below 15 and rent when it's above 20. You can find scads of applications on the internet designed to assist you in making this comparison, but the New York Times's is far and away the best.
· Should I Rent a Home Or Should I Buy? General Market Factors [Curbed LA]
· 5 Possible Financial Incentives For Buying a Home [Curbed LA]