Former Bond Fund Manager Wonders Why Americans Don’t Just Buy A House Already
If you're sitting on your hands waiting for a better time to buy a home, you're missing money.
That was the message from Brian Luke, Head of Commodities, Real & Digital Assets at S&P Global on Tuesday. "The waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers," Luke said, editorializing around more gains on the marquee gauge of US home prices, which continue to "march forward."
The key Case-Shiller 20-City gauge posted a 6.8
The accuracy of that observation depends on the local housing market no? Most of the time, the correlation of local housing markets is national numbers is moderate. Only in a boom or bust are price correlations high. In terms of rates the observation is largely correct. Lower rates will largely be offset by higher prices. Waiting for lower rates is likely an error. Waiting on prices may or may not be an error depending on factors related to your local or regional market.
The decision to buy should largely also depend on time horizon, personal financial situation, taste, and affordability on buying versus renting in a particular housing market.
LOL. Exactly. I live in SF, possibly even an outlier among outliers in terms of cost, but I tried it out on a housing cost calculator, and even including rent increases, the cost of renting my 3br apartment for another 30 years vs the cost of owning the median 1br condo in this town for the next 30 years worked out vastly in favor of continuing to rent. Even with a 30 year horizon it wasn’t even close. But, this local market might not be representative of anything at all outside of this local market. I can’t imagine it’s like this nationally.