Sep 15, 2010

Rethinking Homeownership?

Business Insider article labeled this recent Time Magazine cover story as, "great news for housing market".  Needless to say, you're out of your mind to use a media cover story to guide your home-buying decisions.  There's no doubt that we can outsmart ourselves by complicating matters, but we can certainly do a similar disservice by taking too simplistic of an approach.

Media and sensationalism go hand in hand these days.  These dramatic statements sell product and help the bottom line.  In reality though, if you have the ability to purchase a home (especially if you're a first-time home buyer), should we really believe that buying a property discounted 50% plus at 3.5% - 4.5% interest rates doesn't make sense?  I'm obviously painting with a broad brush and can't speak to the validity of every opportunity in every market, since all deals aren't created equal and there are plenty of homes out there that still shouldn't be purchased despite how far they have already fallen.  However, there are definitely some great housing opportunities out there carrying extremely affordable price tags.  In fact, some price points make it much cheaper to own rather than to rent even when factoring in insurance, property taxes, and maintenance.

So ... no, I'm not rethinking homeownership and neither should you.  The housing picture remains grim, but don't check your brain at the door and get absorbed in this nonsense.  What's next, "Rethinking Investing?".  We all know that financial independence comes from a working wage, right?  Just ask Bill Gates, Warren Buffet, and nearly every other financially well-off individual.

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