If Donald Trump and Warren Buffet agree on something, all of should probably pay attention. And they do agree on at least one thing --now is a great time to buy a new home. In fact, according to many, there has never been a better market for homebuyers, especially in Southern Maryland and St. Charles.
According to the Maryland Association of Realtors (MAR), 2011 ended on a high note for first time homebuyers in Maryland, MAR’s First Time Homebuyer Affordability Index (HAI) increased from 76.7 percent in the third quarter to a record high 84.7 percent. This mean that Maryland’s first time homebuyers had over 84 percent of the income they needed to purchase the typical starter home in that period. The third quarter 2011 HAI is the second highest recorded since MAR created the Index.
Moreover, the National Association of Realtors (NAR) Housing Affordability Index rose to a record high 206.1 in January, based on the relationship between median home price, median family income and average mortgage interest rate. The higher the index, the greater the household purchasing power.
An index of 100 is defined as the point where a median-income household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a 20 percent down payment and 25 percent of gross income devoted to mortgage principal and interest payments. This means the typical family has roughly double the income needed to purchase a median-priced home. For first-time buyers making small downpayments, the affordability levels are relatively lower.
In St. Charles, new townhomes are available in our Gleneagles and Fieldside neighborhoods starting in the 190's, and new single family homes start in the 250's--making new homes in our planned community not only the best value in Waldorf and Southern Maryland, but at just 11 miles outside of the Capital Beltway, also one of the best values in the entire Washington, DC region.
Along with low home prices, mortgage rates are at historically low rates. Buyers may be starting to return to the market, as reflected in fact that homebuilder confidence in the market is the highest it has been since 2007. In St. Charles, sales in 2012 are off to a strong start, with the best sales activity in three years--http://www.stcharlesmd.com/new-home-contracts.
There is one caveat--as the economy and the market improves, some economy watchers predict that interest rates may rise, meaning this optimum time to buy a home may pass quickly. Nevertheless, market fundamentals for homebuyers should stay strong throughout 2012.
The lesson--listen to Warren Buffet and Donald Trump - at least on this issue. If you have been waiting for the best time to buy a home, your time is now.