Almost half of all American adults no longer believe that home ownership is a realistic way to build wealth.
That’s according to Gail Cunningham of the National Foundation for Credit Counseling, quoted in Barron’s this week.
Given that home ownership is a cornerstone in almost every wealth-building plan, this is astonishing. Even if the days of selling a house for an enormous profit are over, building equity in a home beats the pants off paying rent.
Of course, home ownership is not always better than renting, but in most cases, it still is. And even if home prices are flat, building a little bit of equity makes it worth the cost of ownership, especially when you add in the tax breaks associated with owning a home.
Home Ownership Statistics Are Disconcerting
Trouble is, some of the statistics about home ownership are frightening:
- One-third of those surveyed don’t believe they’ll ever be able to afford a home.
- 42% of those who once purchased a home, but no longer own it, don’t think they’ll ever be able to afford to buy another one.
In Tuesday’s column, Karim Rahemtulla detailed the problem that the large number of short-sales are causing in the housing market.
Today, I’m going to give a couple of tips to both house-hunters looking for bargains and investors looking to “buy on fear.”
Real Estate - Buying When There’s Blood in The Streets
There’s an old Wall Street axiom that says you should "buy when there’s blood in the streets." And throughout the real estate market, there is clearly blood in the streets.
In some markets like in Oakland, California, where prices have dropped 32% in the past year and 75% of first quarter home sales were distressed sales, there’s not only blood in the streets, there’s a virtual river of the stuff flowing down Broadway & 17th St.
But if you’re considering buying a property - either as a primary residence, investment property, or vacation home - now is probably a good time to start looking.
