Homebuying: Should you take the plunge?

Spring is typically the busiest season for homebuying, and this year the housing market is already showing signs of coming back to life. According to the National Association of Realtors, the median price for U.S. homes was $173,600 in January, the latest month of available data. That's up 12.5 percent from the same period in 2012, and is the largest year-over-year increase since 2005. What's more, even though home prices are beginning to rise, affordability continues to improve — especially for first-time buyers. The NAR's first-time homebuyer affordability index reached a record high of 127.7 in 2012 (the higher the number, the better). In 2006, at the real-estate market's peak, the index stood at 71.3. Low mortgage rates and an improving economy are helping make homebuying more attractive today. Should you take the plunge? Consider the following. Renting vs. owning In many areas of the country, it is now cheaper to own a home than it is to rent. But much of that advantage still depends on the size of your down payment, the interest rate you'll pay on a mortgage and the amount of time you plan to stay put. more