More Than 80% Surveyed Say Today Is a Good Time to Buy a Home

More than 80% of 708 respondents to a���� survey by Realogy Corp said that today is a good time to buy a home, even though many of them are not eligible for the first time home buyer credit. And nearly 80% of them feel that current mortgage interest rates are either affordable or very affordable. So while the survey found that people were more worried about the economy than they were a year ago, they also understood that with home prices down 30% nationally from 2006, and mortgage interest rates still low (despite the Fed's pulling out of the mortgage-backed securities market at the end of March), owning a home in this country is more affordable than it has been in a long time.

However, others worry that housing prices may go down even further. So, what's the trade-off if prices depress further but mortgage interest rates rise? A mortgage calculator like the one on this site can tell you. Many experts expect mortgage rates to increase one percent to 6% by the end of 2010. And housing prices? According to the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the annual rates of decline of the 10-City and 20-City Composites was less than 1% in January 2010. On the other hand, research firm First American CoreLogic concluded that in distressed areas, prices could fall another 30%!

So, looking at a mortgage calculator, what kind of price drop would it take to offset a 1% increase in mortgage rates? Check out the mortgage calculator. A $300,000 mortgage at 5% carries a principal and interest payment of $1,646. That same loan at 6% costs $1,799 a month. To get the same payment as the $300,000 loan, you'd need to finance just $274,500, which is 91.5% of $300,000.���� That's pretty hefty depreciation. So your decision to buy now or wait probably depends on real estate pricing trends in your area. Real estate sites like Trulia or Zillow, while not offering up the most accurate data on any specific home (valuations on the same property listed on several of these sites can vary immensely), they can be useful in divining very localized trends. That's probably better than asking a real estate agent, because they always seem to think that today is "a great time to buy."