Now May Be a Good Time to Buy Your Rental Home

If you're thinking of turning your rental home into your own by buying it, or if you're just ready to leave apartment-renting behind, now may be the time to jump in.

Home prices are starting to go up in almost all of the nation's major cities, according to a New York Times story.

Two recent index updates show prices increasing throughout the country.

Eighteen of the 20 cities tracked by Standard & Poor's Case-Shiller Home Price Index showed improvement in housing prices in June, that's up from eight cities in May, four in April and one in March.

Housing prices were up 3.8 percent in June in San Francisco, up 2.6 percent in Boston, up 4.2 percent in Cleveland, and even up 1.1 percent in Phoenix, the epicenter of the housing crash.

Also, the Federal Housing Finance Agency's house-price index rose 0.5 percent in June after a revised increase of 0.6 percent in May.

And if that isn't enough news that home prices are going up, the National Association of Realtors report on July sales volume showed a 5 percent rise on sales volume since July 2008. It was the first year-over-year gain since the market peaked in November 2005.

But don't go jumping in to buy a home if you can't afford it. You don't want to be in the same mess as others who bought homes they couldn't afford and then face foreclosure.

Check out your finances and don't let mortgage principal, interest, taxes and maintenance be more than 33 percent of your net income. A 10 percent down payment is also advisable.

And remember to take into account other costs related to owning a home, such as association dues, property taxes and home repair costs.

"Buying is not always the best option and renting is not so bad," said Warren Bland, a professor of geography at California State University Northridge, in a story. "Especially when prices are high, the welfare of the family would be enhanced by staying in a nice rental until prices drop and they can afford to buy without having to forego other expenditures like education, travel, good food, etc. In some markets, rentals are a better deal than home purchases, and should be enjoyed until the time is ripe to buy."

Check home prices in an area you want to buy. They may be ripe enough.

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