1 Reason You Should Buy a House Right Now

Houses are 37% more affordable today than they’ve been over an average of the past 33 years. But that is quickly changing.

Jul 5, 2014 at 9:18AM


Here's a secret I discovered during countless hours of analyzing facts and figures about the housing market: There's a good chance we'll never again see homes as affordable as they are right now.

According to the National Association of Realtor's housing affordability index, which tracks the ability of a typical American family to purchase a median-priced home, houses are 37% more affordable today than they've been over an average of the past 33 years.


Why houses are so affordable right now
There are two reasons for this. The first is that mortgage rates are still remarkably low. Currently, the average rate on a 30-year fixed-rate mortgage is only 4.12%. This is less than half the long-run average of 8.52% dating back to 1971.

The second reason is that nationwide home prices are still 17% below their 2006 peak. To be fair, there are certain cities where prices have already surpassed their former highs. In Denver, for instance, they're up nearly 10% since 2006. But this is an exception, as home values remain depressed in the vast majority of other major American cities.

What's important to appreciate now, however, is that these conditions won't persist much longer. As I write, the Federal Reserve is in the process of reducing its support for the economy. And one of the biggest consequences of its doing so will be higher mortgage rates.


See that sharp uptick in the middle of last year? That was in response to the mere hint that the Fed would begin tapering its third round of quantitative easing, which is the process it used to spur the economy by reducing mortgage rates and thereby increasing demand for housing.

Equally important is the fact that home prices are also on the rise. Over the past year, they're up by 8.9%. Over the past two years, they're up by 19.7%. Over the past three years, they're up by 23%. And there's little evidence that this trend is coming to an end anytime soon.

Put this all together, in turn, and it should be obvious why now is such an opportunistic time to buy a house. Of course, if you want to wait, that's up to you. But doing so could very well be a source of regret later on down the road.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett said this emerging technology is threatening his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping on to one company that could get you the biggest piece of the action. Click here to access a free investor alert on the company we're calling the brains behind the technology.

John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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