Now is the Best Time to Buy a House in Recorded History?

I received an email today from Dr. Steve Sjuggerud's Daily Wealth.  The headline of the email was, to say the least, eye catching.  It said "U.S. Homes: Now the Best Deal in Recorded History".  What Dr. Sjuggerud is really saying is homes are incredibly affordable.  Why?  Three reasons: prices, mortgage rates, incomes.  House prices have declined significantly in the last few years, which everyone already knows.  Mortgage rates are under 5% which is still historically very low.  His third reason, incomes, was a bit of a surprise to me.  Dr. Sjuggerud uses an affordability index that states 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)."

Tying these three points together is sentiment.  With sales volume declining, home prices declining, many Americans see real estate as a bad investment.  When the masses see it as a bad investment that, says Dr. Sjuggerude, is the time to buy.  I tend to agree with him.

Will prices in Idaho and Montana continue to drop?  It is quite possible.  But as I've said before it is very difficult to perfectly time the market bottom.  Prices are considerably off their highs from a few years ago, rates are incredibly low, sellers are motivated and ID and MT are still great places to live.

Speaking of great places to live, check out the link below on top spots to retire.  The list was compiled by Money Magazine and shown on the Today Show.

http://www.msnbc.msn.com/id/21134540/vp/43005523#43005523

You will notice that Bozeman, MT is third on the list!