Tags: Light | buying | home | prices

WSJ's Light: 'Buying a Home No Longer a No-Brainer'

By    |   Monday, 24 February 2014 01:21 PM

The housing market looks a lot different than it did six months ago, when experts said low home prices and mortgage rates created an excellent environment to buy in much of the country, writes Joe Light of The Wall Street Journal.

"Buying a home is no longer a no-brainer, whether you are buying as an investment or to live in it," he argues.

Several statistics prove this point, Light notes. First, home prices soared 14 percent in the year through November, according to the S&P/Case-Shiller index of home prices in 20 cities.

Editor’s Note:
These 38 Investments Have a 96% Win Rate

In cities such as Las Vegas, Los Angeles and San Francisco, prices have jumped more than 20 percent.

"Price growth has been very strong, but it's unsustainably strong," Moody's senior director Celia Chen tells Light.

Meanwhile, the average national home price divided by the average rent, a widely used measure of housing costs, registered 14 in the third quarter, according to Moody's Analytics. That compares with an average of 12 between 1989 and 2003.

For the most part, "you can't buy now and expect a big gain," Morris Davis, a real estate professor at University of Wisconsin, tells Light. "There's more risk than there was."

In a sign of weakness for the housing market, existing home sales fell 5.1 percent in January to the lowest level since July 2012, according to the National Association of Realtors.

"Some housing activity will be delayed until spring," Lawrence Yun, the group's chief economist, predicts. "At the same time, we cannot ignore the ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates."

Editor’s Note: These 38 Investments Have a 96% Win Rate

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Personal-Finance
The housing market looks a lot different than it did six months ago, when experts said low home prices and mortgage rates created an excellent environment to buy in much of the country, writes Joe Light of The Wall Street Journal.
Light,buying,home,prices
310
2014-21-24
Monday, 24 February 2014 01:21 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved