Q&A with Glenn Reynolds
Housing market remains ripe
for homebuyers, banker says
Q: Is this a good year to buy a home?
A: There's a lot of good news about housing right now. According to the latest data — the fourth quarter of last year — 74.9 percent of the homes that sold between October and December were affordable to families earning the median income of $65,000, up from 74.1 percent from the previous. The affordability of homes is reaching close to historical highs.
Q: How about interest rates? Do they remain at record lows?
A: Yes, and they're expected to stay low with the Fed aiming to keep the Fed Funds Rate between 0 percent and 0.25 percent. It expects that number to be “exceptionally low” until at least mid-2015. Arvest loans to people with credit scores from 620 and above with as little as 3.5 percent down. First-time homebuyers really should consider purchasing now, for this window of almost perfect conditions — low interest rates and low prices — isn't likely to last much longer, since home prices are expected to continue rising.
Q: Aren't home prices starting to rise?
A: Yes, but prices still remain at 30 percent below peak prices before the housing crash. More often than not, low home prices are indicative of a struggling real estate market, so this gradual rise is a good sign of economic recovery as long as consumers don't wait for prices to fully rebound before they decide to buy.
PAULA BURKES, BUSINESS WRITER