Anita Acacio- Preventing Foreclosures

With newspaper headlines declaring that foreclosures are on the
rise, short sales are difficult to navigate, and the rate of
homeownership is on the decline, some home buyers may no longer
see the value of purchasing a home. However, there are several
reasons why homeownership makes economic, financial, and
personal sense.

MAKING SENSE OF THE STORY FOR CONSUMERS

Home prices have declined approximately 30 percent from their
peak, according to Standard & Poor’s Case-Shiller Index, which
is good news for home buyers hoping to purchase a house at an
affordable price. As a result, statewide affordability reached
64 percent in the second quarter of this year, meaning 64
percent of California households could afford to purchase an
entry-level
home in the state.

Although home buyers should not view a home strictly as an
investment, generally speaking, homeownership does offer risk
capital. The median home price in California has risen
year-over-year for nine consecutive months, which implies home
equity will increase over the next few years.

Owning a home also can be beneficial because it acts as “forced
savings.” While the monthly mortgage payment may be slightly
higher than renting an apartment, most renters do not put the
difference into a savings account. The portion of a monthly
mortgage payment that’s allocated toward the principal of a
mortgage shouldn’t be viewed as a cost, but rather as a forced
monthly saving, because in the long run it’s building equity in
the home.

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http://takeaction.realtoractioncenter.com/ct/X7AK8Md1HUvJ/