The Experts are starting to Buy Homes

Have home prices hit bottom? They have in some parts of the country and some towns around Boston. Even if they have Sellers can't expect much of a bounce in price for a very long time.

At the Center for Economic Policy Research, in Washington D.C., analysts are predicting that the pricing arrow is starting to point up in some areas, but not very far nor very fast. There are still way too many foreclosed homes on the market and too few Buyers that have confidence with their incomes and jobs.

So, what did the center's co-director do? He bought a house for himself and his family. He doesn't expect its value to raise much in the foreseeable future. But the home had features he loved. The price was affordable, and the loan's interest rate was below 5 percent which is historically low.

This set of circumstances encouraged him to take the big plunge and acquire a perfect property that he and his family could call home for many years to come.

Today's reasonable home prices can make a good case for purchasing rather than renting, say advisors quoted in USA Today. While many first-timers are leery of making a long-term commitment to purchase, here is a way you could determine if the move is a wise one.

 Divide the price of the home you are considering by the annual rent for a comparable place. If the number falls below 15, buying starts to look like a good idea.

 Consider whether you will stay in the home long enough to make the purchase worthwhile. Closing costs can be quite high. If you intend to sell the house and buy another in three or four years, you could take a loss on it unless we are at the very bottom of the market and prices go up a lot faster than most of us believe they will.  Analysts say it's reasonable to buy a home only if you plan to stay in it for five to seven years. When showing homes in this market I tell everyone I work with that like it or not this a 10 year commitment.