More people are jumping into homeownership -- and all that goes with it. (iStockphoto)
Now that home prices are falling and homes are becoming more affordable, first-time homebuyers are making up a larger share of all home purchasers -- 41 percent -- says the National Association of Realtors. Plus, with some predicting the housing market to hit bottom this year, 2009 may be the year for even more first-time buyers to take the plunge.
The Miami Herald reports that in many cases, it's now actually cheaper to buy a home than to rent one. For example, in Florida, the median price in Miami-Dade and Broward Counties is now down to $216,500, with home prices reaching 2003 levels in the southern part of the state, the Herald says. The paper also notes that with interest rates low, abundant deals due to foreclosures and short sales, and a $7,500 federal tax credit for first-time buyers, buying a home has become more attractive for many previous non-owners. (However, the publication does note that rents are also falling and that buyers may want to hold off on making a decision now since home prices are still dropping and any home-price appreciation is unlikely to happen anytime soon.)
However, those on the fence may want to make a move sometime this year -- Moody's Chief Economist Mark Zandi of Economy.com expects the housing market to hit bottom by the end of this year. "Notwithstanding the intensifying economic gloom, the bottom of the housing downturn is within sight," Bloomberg.com quotes him as saying. At bottom, the Case-Shiller home price index will be 36 percent below its 2006 peak, he says. Many of the largest home-price declines will be seen in Florida and California, with Naples, Fla., experiencing the greatest top to trough decline: 70.1 percent, Bloomberg says.—Lauren Baier Kim