More Evidence This is a Housing Market for the Record Books

Housing Prices Dipping Again This Year

Housing prices are likely to dip more this year. Coupled with low interest rates, it’s a great time for those considering a home purchase.

A major housing index predicts home prices will fall nearly 1 percent more before the end of 2012, with a gradual climb to follow.

Right now, though, it’s a housing market perhaps unlike any other in modern memory. The Fiserv Case-Shiller index released Tuesday shows that a conventional monthly mortgage payment accounts for just 12 percent of median family income. That’s the lowest percentage on record, which dates back to 1971.

Index experts expect housing prices to finally reach their lowest point later this year.

It’s important not to paint with too broad a brush. Not every veteran is a great candidate for homeownership. But for those who can handle the commitment, the combination of low interest rates and bargain-basement housing prices definitely makes 2012 a pretty incredible time to jump in the housing market.

Stat Snapshot

Here’s a look at some of the highlights of the Fiserve Case-Shiller analysis, which looks at price trends in more than 380 markets nationwide:

  • When they bottom out this year home prices will have fallen 35 percent from their 2006 peak
  • Home prices and rents now have a relationship last seen in 1998
  • As a ratio, median single-family home price to median-family income is at its lowest since 1991
  • Home prices in the fourth quarter of 2011 fell four percent from 4Q 2010

But there’s also room for optimism in real estate and housing circles. The index notes that home prices increased or remained flat in about 20 percent of the 384 markets surveyed.

“We expected that home prices, which generally lag changes in sales activity by nine to 12 months, will stabilize by the end of this summer and then rise at an annualized rate of 3.9 percent over the next five years,” Fiserv chief economist David Stiff said in a news release.

Military Buyers

So what does it all mean for military homebuyers?

It’s difficult to make sweeping pronouncements based on one housing index. Housing prices may continue to fall into 2013, and interest rates are likely to stay relatively low until 2014 at the earliest. But the folks at Fiserv Case-Shiller might also have it exactly right.

The bottom line is this is a great time to be a homebuyer, with prices and rates that’ll make future homebuyers scream in a decade or two. But there’s still the matter of qualifying for that dream home. Committing to working to build a healthy credit profile is more important than ever.

To talk with a loan specialist about getting into this market, call 855-524-7279 or use this brief form to get connected.

There’s also help for veterans and active military struggling with credit problems in our Lighthouse Program, which will work with you for free to develop a plan to boost your score and get on the path to loan prequalification. You can talk to a Lighthouse credit specialist at 888-392-7421.

Photo courtesy of laudu