Five Signs That Say ‘Buy’

Here are five signs that say it is the right time to buy a house, according to The Wall Street Journal. First is jobs. Prospective buyers should review job-growth data from the U.S. Bureau of Labor Statistics, at www.bls.gov. Unlike many backward-looking economic statistics, jobs data are only about a month old and can “clearly show the direction of the local economy,” says Carolyn Beggs, chief operating officer of real-estate data provider Local Market Monitor Inc. You also want to see a brightening personal-income picture for the previous six-month period. Those numbers are available via the U.S. Dept. of Commerce’s Bureau of Economic Analysis, at www.bea.gov. The second sign is recent sales activity. Three factors should be taken together: housing inventory, sales volume, and prices. If inventory is falling and transactions are picking up, that is a good sign. State and local boards of realtors often publish monthly inventory statistics. Inventory breakdown by metro area also can be found at the U.S. Census Bureau’s website, in the American Community Survey (www.census.gov/acs/www/). Construction is the third sign. While not as reliable as jobs or sales-trend data for getting a read on a local housing market, the number of permits recently issued for local builders is useful for gauging builder sentiment and, by extension, future housing activity. You can get recent permit information from your county or municipal building department, or via the National Association of Home Builders (www.nahb.com). The fourth sign is mortgage availability. If you live in an area where most people use mortgages, it is especially important now to gauge local lending patterns. In the aftermath of the financial crisis, most national banks tightened lending standards. But some local banks haven’t been hit as hard by the housing crash and are more willing to lend, even for higher-priced homes. The fifth sign is anecdotal evidence. Driving around neighborhoods, checking out open houses, and talking to local agents still are good ways to gather local-market intelligence. | Read More