Now is literally the best time in recorded history to buy a house in America...
Right now – today – U.S. real estate is the most affordable it's ever been. Ever.
When I say "affordable," I'm looking at three things: house prices, mortgage rates, and incomes.
With the Affordability Index near 200, the median family has 200% of the income necessary to buy the median home (or more specifically, to qualify for a conventional loan on the median home).
It's easy to see where we are now...
Right now, as you know, house prices are sitting near new lows for this cycle, down by roughly one-third (depending on who's counting). And right now, mortgage rates – after ticking above 5% earlier this year – are all the way down to 4.5% again, near all-time lows.
So it's simple: With the worst house-price crash in American history, combined with the lowest mortgage rates in history, you can now afford more home than ever.
Meanwhile, hope is gone. Everyone thinks housing is hopeless. That is when a bear market ends and a new bull market begins.
At a conference I attended last month, some speakers spoke woefully of the large supply of houses for sale. That will take care of itself in time. Others bemoaned the certainty of higher interest rates in the future, which would hurt housing. But they shouldn't be so certain...
Twenty years ago, Japan faced a housing bust similar to ours. Japan's government has cut interest rates to near zero and printed money. And long-term interest rates in Japan currently sit around 1%.
Even rising interest rates won't kill housing... In the 1970s, interest rates were rising, and house prices outperformed stock prices.
The story is simple: House prices have fallen more than ever... And mortgage rates are lower than ever. If you can buy a house now (and want one), go for it.
Now is the best time in American history to do it.