Is Buying a Home in Today’s Economy a Good Idea?

By: Craig D. Antonelli, President of Antonelli Construction, LLC and

Chairmen of the Rochester Homebuilders Association

Let me say this right upfront. As a long-term investment, homeownership is STILL one of the best investments for individual households.  Homeownership typically represents the largest source of net worth for most families. Owning a home builds equity and helps grow your personal wealth over time.  Since housing investments historically appreciates over the long term, when owning a home, the financial return on your investment will be realized when you sell.

The real estate market in Rochester is steady and stable.  Beyond being a good investment, housing provides a place to raise your family and create lifelong memories. Additionally, there’s ample research demonstrating that homeownership produces a wide array of significant individual and community benefits.

“Why should I buy now?” After all, over the past few years the national headlines have said the housing market is down and out, with defaults rising at an alarming rate, and mortgage markets so frozen that buyers can’t get a home loan at any price.

Clearly things have changed.  There are a multitude of reasons that now, more than ever, it is a good time to buy a home.  Interest rates remain at record lows, Consumer Confidence is on the rise, wall street is rebounding and home prices are competitive, which allows you to get more home for your dollar.  In addition, there are many choices with a wide selection of homes on the market.

Homeownership has a track record that is virtually unmatched by any other purchase in terms of its real benefits.  What buyers need to understand is that housing markets, like all markets, inevitably have their ups and downs. This spring has revealed a brighter light at the end of the tunnel with data showing housing starts are on the rise.   Most agree that the new home market is in a re-building year, but with the renewed interest in home buying, there is evidence of growth which in turn leads to assisting in an economic upswing.

Despite the turmoil in mortgage lending, if you have good credit, a job and steady income, you will find there is still plenty of mortgage credit offered at historically low rates.  For well qualified buyers, rates are running at about 5 percent, which is extremely good on a historic basis.

Once again, it’s important to understand that the long-term fundamentals for housing remain positive.  Look at the anticipated population and household growth, look at supply and demand, and consider the increasing scarcity of available land in markets where jobs are located and where people want to live. Over time, these factors will help drive up the need and value of housing.

One more thing to consider: To make the argument that home prices will keep going down, you have to assume that the cost of building a home is going to go down. That will not happen. Land, material and labor costs will only keep getting higher. So the price of new homes will increase overall, and the price of existing homes, due to market competitiveness, will go up as well.

A home should first and foremost be a place in which to live and raise your family. Too many people in the recent past got carried away with the idea of making a quick buck by purchasing a home or condo and then reselling it right away at a profit. Those days are long gone. We have currently taken a step back and are now implementing the fundamentals of housing.

The bottom line is this: if you are looking for a place to live and for a solid long-term investment, now is a good time to buy a home.

For more information on why now is a good time to buy, contact The Rochester Home Builders Association at www.rochesterhomebuilders.com

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