People don`t buy a house based on price

valinva | Jan 15, 2013 11:22 AM ET People don`t buy a house based on price. they buy based on payment. Rents are now more than a mortgage for those who can qualify at these low rates. In some cases by a large amount. So long as someone is able to qualify and the payment is lower than rent, you will see housing prices rise. When rent is cheaper, prices will flatten. If mortgage deduction is taken away, house prices will fall to the level where they again are equal or lower than rent. I sold real estate full time in the 80s when interest rates were almost 12%. When they started to drop the house price went up accordingly. the payments stayed the same. People buy a payment not a house.

GenerationX | Jan 15, 2013 11:26 AM ET According to an article on Forbes, ā€œ5 expenses that take half our lifetime earningsā€: ā€œHouse Donā€™t bite off more home than you can chew. How much house can you comfortably afford? For most people the answer is a house with a purchase price of no more than three times their annual household income.ā€ today.msnbc.msn/id/45616348#.TwM9Sl3OucM Median prices for homes are still way over 3X median income. With 50% of Americans making $32,000/year or less, the median price for homes should drop to $96,000 to be a normal housing market.

GenerationX | Jan 15, 2013 11:26 AM ET Thank you to the Today Show for reminding us of what a REAL economy, middle class boom, living wages, and legitimate home prices we had in 1952. In 1952, at the height of the last REAL housing boom, incomes were $3,900 and new single-family homes were being built for $9,000: today.msnbc.msn/id/26184891/vp/45926049#45926049

Every1isBIAS | Jan 15, 2013 11:32 AM ET Hmmmm, sounds like another housing boom bubbling.

GenerationX | Jan 15, 2013 11:37 AM ET "When Banks Walk Away, Homeowners Don`t Always Win" Text Size Published: Monday, 14 Jan 2013 | 12:16 PM ET By: Diana Olick CNBC Real Estate Reporter cnbc/id/100377676

Mr.Clumpus | Jan 15, 2013 11:41 AM ET blathering as blathering does

Yakov72 | Jan 15, 2013 11:42 AM ET valinva | Jan 15, 2013 11:22 AM ET So long as someone is able to qualify and the payment is lower than rent, you will see housing prices rise. === Are we supposed to say "idiots" instead of "people"? House is a huge investment and a big commitment. You`re coming from perception prices will grow up constantly. Live showed, it`s not true. On a second note, paying a higher rent than a payment (btw, not always true) gives you way more freedom. On the other hand, try to move to another house - and encounter really big expenses.

JohnSteel | Jan 15, 2013 11:50 AM ET This "increase" in house prices is yet another example of the shady misuse of statistics by the real estate business. Did the value of houses increase 7.4%? NO! The median price of the houses sold was 7.4% higher. That does not mean the price of those houses increased. What this "increase" reflects is fewer distressed properties on the market and fewer foreclosures (which the real estate business continues to count as sales). I follow the home market closely and in most areas prices have stabilized. But many homeowners continue to have to slash their price, especially on properties which are in less than ideal condition. Tens of millions of homeowners remain underwater on their mortgage. Beware Real Estate salespeople bearing tales of skyrocketing prices and demand.

duck33 | Jan 15, 2013 11:50 AM ET I read something the other day that said something like if interest rates went back to normal the payment for a $400,000 home would only pay for a $280,000 home. Homes are still in a bubble and history shows that your best time to purchase a home is in periods of high interest rates with cash and selling it when interest rates are low. Buying a home now will prove unwise history says so...... The 1929 crash was caused by the bankers blowing up housing and it did not recover until WW2 It will not recovery until WW3 or we bring back glass steagall






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People don`t buy a house based on price

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