Falling housing prices have greatly improved home affordability. (Photo: iStockphoto)
Oh, to be a first-time homebuyer. I, like many other people, jumped into the housing market when it was going strong. But had I waited, I would now be in the position to buy at lower prices, and without the added difficulty of trying to sell a home during a real-estate downturn.
It seems that now is a great time for homebuyers who have the means to buy a house (have a steady job, a good credit rating, etc.). If a homebuyer were to purchase a home at the current U.S. median price of $175,400 (which isn't really possible in New Jersey, where I live, but one can dream), he or she would save $254 a month compared to the median price and interest rate of a year ago, writes J.W. Elphinstone for the Associated Press.
"I bet when they incorporate December's numbers, it will show housing is as affordable as it was in 1973," says Patrick Newport, an economist with IHS Global Insight, in Elphinstone's story. He estimates that home prices will fall another 10 percent to 15 percent this year, Elphinstone says.
Meanwhile, Karl Case, co-creator of the S&P Case/Shiller home price indexes -- which saw a record 18.2 percent drop in 20 U.S. cities in November from November 2007 -- is predicting that we may see the light at the end of the housing market tunnel this year.
"It's not going to be a terrible year for the housing market, believe it or not," a Bloomberg.com article quotes him as saying. "I think these stabilizing forces are there, and over the next year you'll see the housing market come back into equilibrium."—Lauren Baier Kim