Is Now The Right Time To Buy A Home? Are You Sure!?

Posted on May 5th, 2008 in Mr Mortgage's Personal Opinions/Research

In this video, I cover what I have always used as indicators of a home’s value or investment potential. There is no perfect valuation metric due to wildcards never before seen, such as bank REO inventory, which made up 38% of the existing home sales in March in the state of CA and is being discounted by 20-50%. But, at the very least this video outlines some easily understandable indicators and describes in detail the biggest risks confronting prospective home buyers. Oh and by the way, please subscribe to this blog by entering in your email address above and an daily recap will be sent to your email address. -Best, Mr Mortgage

YouTube Video Link http://www.youtube.com/watch?v=1PDeMZYRjLQ

Foreclosure Radar Link http://www.ForeclosureRadar.com

How much house can you afford?Use this table below is conjunction wih the video above in order to figure out how much the median home owner in your city can afford now that all the exotic loan programs are gone. The answer may shock you.


Click the image for a larger picture

This simple table below illustrates how so much affordability has been lost in the past year. Without exotic loan programs/guidelines such as interest only, stated income, zero down, 2nd mortgages to replace down payment, higher debt-to-income (DTI) ratios, Pay Option ARMs etc, we have gone back to a 30-yr fixed rate society overnight.

MORE MR MORTGAGE – YOUTUBE SERIES

Mr Mortgage – Non-mainstream March Existing Home Sales Report

Mr Mortgage – March Foreclosure Crisis

Mr Mortgage – Here Comes the ALT-A Crisis

13 Responses to “Is Now The Right Time To Buy A Home? Are You Sure!?”

  1. […] Original post here […]

  2. […] Admin wrote an interesting post today onHere’s a quick excerptUse this table below is conjunction wih the video above in order to figure out how much the median home owner in your city can afford now that all the exotic loan programs are gone. The answer may shock you. … […]

  3. […] Read the rest of this great post here […]

  4. […] Hosting Discussion – Powered by vBulletin wrote an interesting post today on Is Now The Right Time To Buy A Home? Are You Sure!?Here’s a quick excerptIn this video, I cover what I have always used as indicators of a home’s value or investment potential. […]

  5. […] Heck Of A Guy | If this has made just 1 person spew Pinot Noir through his or her nose, then it&acir… wrote an interesting post today on Is Now The Right Time To Buy A Home? Are You Sure!?Here’s a quick excerpt-Best, Mr Mortgage. YouTube Video Link http://www.youtube.com/watch?v=1PDeMZYR… […]

  6. […] admin wrote an interesting post today on Is Now The Right Time To Buy A Home? Are You Sure!?Here’s a quick excerptForeclosure Radar Link http://www.ForeclosureRadar.com. How much house can you afford?Use this table below is conjunction wih the video above in order to figure out how much the median home owner in your city can afford now that all the … […]

  7. Hi,

    It looks like you are using pre-tax income in your chart. If yes, then the debt-to-income would be much higher than 40%.

  8. banks use pre-tax income, which is why it was even more amazing when for years, they did 50% debt ratios qualifying at interest only payments on an ARM that will adjust higher and faster than the person could ever hope to make in pay increases.

  9. Amazing ? And disgusting. I thought that bankers were serious people. Well. The owners can stop eating and stop using their cars. Most of these loans were sold to stupid foreigners, not just US investors. It would be nice to have a breakup between courntries.

  10. A DTI of 40% is the absolute bubble maximum. Historically, I believe it was around 28%. As a renter, I am much more comfortable with a rent-to-income (after tax) in the 20% range than I was in the 30% range. A better job and a cheaper town made the difference there. What continually stuns me is the change of mindset that will have to occur in people my age (late 20s) as they have to actually save a substantial downpayment. I see so many living month-to-month with today’s monthly payment mentality and huge debt overhanging. It’s not just housing that people are levered up with. The whole debt bonanza did an extraordinary job of pulling forward consumption. There’s going to be a bigger lag than people think as a result.

  11. […] Is Now The Right Time to Buy a Home? Are You Sure?!? […]

  12. No. It ain’t. Either in the US, in Bulgaria, in Ukraine, in France, in Canada or in Québec or in China. I cannot find ONE cheap real estate market in the world ! It’s that bad !

  13. […] http://mrmortgage.ml-implode.com/2008/05/05/is-now-the-right-time-to-buy-a-home-are-you-sure/ […]

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