Over the last five years, the housing market has gone from boom to bust. The recovery is slow at best. But what does that mean if you want to fulfill the American dream - and buy a home now? Is it time? Or should you still rent?
The housing market is opening doors for aspiring homeowner Harley Fischel. He's just days away from closing on a new condominium, for the first time ever.
"Finding a home versus renting, I'm going to be paying a lot less, by about $600 per month," says Fischel.
It's cheaper for Fischel to buy than to rent. At his current apartment he shells out $1,400 per month, his new mortgage will top out at $800 per month.
"It's definitely a no-brainer."
Fischel didn't get that deal by luck - he did his homework.
"I did the math, did the research. I priced out loans with interest rates and calculated whether I wanted a 30 or 15 year mortgage and found 15 is more efficient," says Fischel.
It takes a lot of work to decide whether you should buy or rent. There is plenty to consider, start by answering these questions: What is your credit score? How much money can you put down on a home? How long are you planning to own it?
"If you don't have any money in the bank and you haven't prepared yourself to get a loan, then you may have to wait and just sit tight for another year, save your money," says Dene Gross, of Lang Realty .
But if you have a good credit score, cash to use for a deposit and plan to stay in the home for five or more years, now might be the time to buy. Interest rates are at rock bottom, below 4%. Also home prices across South Florida have plummeted; but holding on to the property long enough to break even is key.
"Now is not the time to be flipping houses, you're not going to make a profit doing that today," says Gross.
Damien Barr owns Kangarent , a company that links people up with rentals. He's says unemployment has led people to rent for years, and will continue to, until the job market stabilizes.
"The usual would-be buyers are thinking twice about buying and continuing to rent to see what happens in the market," says Barr.
Barr says too many of his clients don't have the luxury of tying up money in a house that will take years to appreciate in value.
"They're afraid to buy, they're not in a position to buy. Any money they do have if they've got some savings, they want to hold onto it for whatever reason, if they possibly have to move, or may lose their job," says Barr.
Fischel says that's part of why he rented up until now.
"It's a lot easier to rent because you don't have the commitment of a 15-30 year loan," says Fischel.
Saving his money for the right time to buy is paying off for him. He's buying a condo worth $200,000 a few years back for a mere $80,000 now.
"Owning something and putting it into a mortgage is better than putting it in the bank, and definitely better than just giving it to a landlord, because you can get something back out of it," says Fischel. "It's worth it to have a good deal."
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