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In focus tonight that housing market my next guest says no other investment.
Out there right now can offer what the real estate market -- joining me now David -- Wall Street columnist for MarketWatch.
Did great to have you on the shell why are you so -- -- it's a good time to buy a house.
Well you reference to the -- earlier -- you you've mentioned this Warren Buffett quote in Warren Warren of course are great American investors said.
Be fearful when others are greedy.
Be greedy when others are fearful and I think fearful.
Pretty much describes how how a lot of people feel about housing right now.
And and we've seen -- the housing prices are down as your earlier guest mentioned.
About 31% from 2006.
People are scared of the housing market given what's happened.
With mortgages and foreclosures.
But when you look at the raw numbers -- you just cannot be the deal out there.
Well in look at mortgage rates for goodness sakes I mean.
Gonna save yourself Madonna though just by locking in a thirty year fixed rate of 3.5 6%.
Look so many people in this country have never seen mortgage rates that low.
It's it's so one usual and you really can't overstate the impact of that right David.
That's right and and you know a lot of people get hung up on this idea -- -- rates when there are three and a quarter and now they're back up to three.
And three quarters or 4%.
It doesn't matter when you're talking rates anywhere below 5%.
I mean that is pretty much free money and of course people need to also remember.
That the government offers the mortgage interest deduction so every year you're gonna write all that interest you pay off if your taxes I mean the amount of money.
Getting knocked up your tax felt the end of the year is it is worth that in itself so that is the great advantage over renting -- stage and that's why -- -- Shortly -- is slightly different audience having a lot of people milling about the mortgage interest deduction right.
But let me tell you I talk to so many people who I think are very Smart with their money.
And they tell me housing Gerri it's never coming back it's a lousy investment.
You've seen what's happened since 2006.
You're never gonna see these prices rice and you say.
Well I think for two reasons it is a great investment first of -- you can't park your money anywhere else right now.
You can't park it in the stock market it's it's overpriced by a lot of measures you -- wait to the economy comes back a little bit you certainly can't market in bonds treasuries are paying.
Less than 2% for for a ten year.
Is so housing is really the last place where prices are deflated and there's a potential for.
Value being created are in the great thing is it's a it's an investment that pays off right now it's an investment.
In a hundred markets across Syria US the -- the hundred biggest housing markets it is cheaper to buy can rent a -- are the biggest housing market.
Of course -- -- point I think that's a great fact -- saying that in a hundred of the biggest markets in this country it's cheaper to -- Then it is to rank right now.
Absolutely -- you look at -- out there they are they're going up because -- -- the reality is is that.
Regardless of the sub prime meltdown.
The fact that we have all these foreclosures out there.
We have -- come we have a country that is expanding the population is expanding people need places to live.
And again a lot of people are afraid to go out and actually buy a home.
They're having trouble getting credit.
Now that and that's another factor -- it's.
You're not gonna be able to run out there and put a thousand dollars and by you know half a million dollar home like you were a few years ago you're gonna have to go if the world to put some have -- -- you know -- I changed 40%.
David thanks for coming on tonight great stuff really interest -- conversation I hope we see against him.
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