Housing is Now Cheap -- Or is It?
✉️ Want to forward this article? Click here.
Brett Arends, The Wall Street Journal columnist who we believe does a great job of explaining financial issues in layman’s terms, declared today that “housing is officially cheap,” an assertion that will likely have as many detractors as supporters.
Arends reasoning, on the heels of the latest Case-Shiller numbers that were released recently, was two-fold:
- Real estate prices in the Case-Shiller 10-city index have now fallen 30 percent from their 2005 peak.
- Mortgage rates have dropped significantly. “In 2006 you had to pay an average of about 6.4 percent on a 30-year fixed loan, according to the Federal Reserve. Right now you can get deals for about 5 percent,” Arends writes.
Based on these two factors, and some additional research, Arends states that “buying a home now is as cheap as it was in the mid-1990s, when houses were an absolute steal,” with the caveat that affordability is very localized.
There are, of course, those who take issues with Arends’ assertion. The website Calculated Risk claims that it is misleading because it is largely based on interest rates without taking other factors into consideration. The site notes: “House prices are not currently “cheap”. They just aren’t outrageously expensive nationally anymore.”
What do you think? Have prices come down so far that they can actually be considered cheap? Let us know in the comments.
Similar Posts:
See other articles related to: case-shiller, editors choice, home prices, the wall street journal
This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/housing_is_now_cheap_or_is_it/1641.
Most Popular... This Week • Last 30 Days • Ever
Mortgage rate buydowns can be a good option for buyers who want to save money on inte... read »
Plans filed this week provide the latest look at the 106-key hotel in the works at an... read »
A plan to add another new residential building to the Friendship Heights pipeline is ... read »
The eight-bedroom, 35,000 square-foot home in McLean known as The Cliffs went under c... read »
The large new development would take the place of the Ballston One office building al... read »
- How Does a Mortgage Rate Buydown Work?
- A Look At Georgetown's New 100-Key Hotel Along The Canal
- Donohoe Files PUD For 127-Unit Development in Friendship Heights
- A $30 Million Sale? One Of The DC Area's Most Expensive Homes Finds A Buyer
- Updated Plans Filed For 328-Unit Development At Arlington Office Site
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro