There are lots of reports that the housing market is making a comeback. Although, the housing market is coming back it still hasn’t fully recovered from the financial crisis. The housing market in general is making a comeback, but some areas are still struggling while others have fully recovered. Whether housing is a good investment depends on whether housing is coming back in your local market.
If you are looking to buy a home to live in rather than as an investment than your criteria for choosing a home will be different than if you are buying for investment. You would look at things such as whether it is a good place to raise your kids rather than just considering the potential investment return. Many people who delayed buying a home are now considering a home purchase. This should help boost the overall housing market.
When deciding to buy a house you will want to consider if buying or renting is the better decision in your market. One way to determine that is buy looking at the buy/rent ratio. To determine the buy/rent ratio you divide the purchase price of a house by the amount it would cost to rent a similar property. If the buy/rent ratio is under 15 than houses are considered cheap in the area and it is a good time to buy. This is only one factor to use when determining whether a house is a good investment and should be used only as a starting point.
Housing may be a good investment now depending on your local market. Of course, even in good markets you can make a bad purchase decision. If you are going to invest in housing you need to do your research.