The same precipitous decline in home values that sucker punched American homeowners when the housing bubble burst has provided homebuyers with the rare opportunity to land the deal of a lifetime.
“When you look at the affordability circumstances now based on the relationship between mortgage interest rates, median prices and median family income, this year is the most favorable on record dating back to 1970,” says Walter Molony, spokesman for the National Association of Realtors.
According to the NAR’s Housing Affordability Index, the median price of a single-family home has dropped from $196,600 in 2008 to $168,400 in August 2011. During that same period, median mortgage rates declined from 6.15 percent to 4.69 percent, and the money you would need to buy the average home dropped nearly 25 percent from $45,984 to $33,504.
“For buyers who can get a mortgage in the current market and who have that long-term view, this is really a golden opportunity,” Molony says.
Just one caveat: Don’t buy unless you’re planning to stay for a while.
“First-time and repeat homebuyers should plan to stay in the home for 10 years,” Molony says.