Brosious says that homes today are cheap and so is money. "Suppose you buy a $100,000 home today and get a 30-year mortgage for 3.9%," he says. "Your monthly payments are $471.67 and you would pay $169,800 over the life of the loan. However, if you waited and the price drops another 10% to $90,000, but the interest rates for a 30-year goes up to 4.9%, your monthly payment is now $477.65 and you would pay $171,955 over the life of the loan. So you have to consider both the price of the home and the price of money."
Meanwhile, he says, the rents have climbed as apartment vacancy rates have fallen. He says the average two-bedroom home in Allentown rents for $957 per month. A homeowner paying $200 a month in taxes would still be paying less on those home purchases. "And the monthly P&I would stay fixed throughout the life of the loan. No such guarantee with the apartment rental."
Given other advantages, like the tax deductions for interest, Brosious says he wouldn't hesitate to recommend a home purchase to a client.
"The old rules still apply," says LeBlanc. "That is, you need to [be able to] afford the mortgage, you must have 20% down and you should be looking at it as a long-term place to live, which means that over the short term it may be difficult to sell and/or get all your money back."
But even LeBlanc, who makes a good case for buying a home, says it's a lifestyle asset, not an investment, nor is it a piggybank or something to flip.
Maryan Jaross, a planner with Gold Medal Waters in Colorado, says it's important that the down payment not eat up the entire savings account, that there will still be a six- to 12-month emergency fund, that the cost of owning a home (maintenance, repairs, insurance, taxes, etc.) is included in the financial plan and doesn't undo it. Also, a house must not impair a person's ability to keep saving for retirement.
"Expecting to sell the home to fund retirement is not realistic," she says. "You still need a place to live."