These Days, First-Time Home Buyers Are Primed to Cash In
In the nearly 16 years that I've been writing this column, I've never seen a better market in which to be a first-time home buyer.</br></br>The rising tide of foreclosures has pushed down home prices significantly over the past 18 months. Homes, relative to income, are about at the historic norm, which means they're more affordable than they've been in at least a decade.</br></br>Beyond that, if you buy a foreclosed property, you might wind up spending even less, as lenders struggle to process all of the foreclosures and short sales that are piling up. (If there were no more foreclosures in Florida, it would take the courts nearly two years to process all of the foreclosures on the docket today.)</br></br>Not only have homes come down in price significantly, but 30-year fixed-rate loans are at about 5 percent. Some first-time buyers are getting 15-year rates at 4.5 percent or lower. These are historically low interest rates that will seem downright cheap if rates rise above 7 percent, which they will probably do several years from now.</br></br>Spending less to finance a property means you can get more for your money or save more for retirement or other purposes. With interest rates so low and home prices falling, homeownership becomes affordable to many first-time home buyers.