It’s always Thanksgiving when you own a home

Those warm, fuzzy feelings between Thanksgiving and Christmas can be gold for the real estate industry. The phrase "we can get you in your new home by Christmas" is a powerful marketing tool for would-be buyers with visions of family and friends gathered around the holiday table.

We're not supposed to let emotion drive what is likely the biggest single investment decision we will ever make - especially in a housing market swirling with talk of bubbles. But the cold, hard facts suggest now is as good a time as any to buy a home.

Bubble or no bubble?

Recent reports suggesting the Canadian residential real estate market is headed for a U.S. style meltdown are making a lot of potential homebuyers nervous. Most come from foreign sources including the Organization for Economic Co-operation and Development, the International Monetary Fund and the Economist magazine, which focus on red-hot condo markets in Vancouver and Toronto.

Most Canadian based economists acknowledge a "frothy" condo market but predict a mere softening of the broader housing market. In other words, homes outside the Vancouver and Toronto condo markets are doing just fine.

Home Sales in the first seven months of this year are 4.6 per cent below the first seven months of last year.

However, sales across the country increased by more than 11 per cent in August from a year ago.

Average home prices rose 8.1 per cent over the same period and August home sales are running above their 10-year average.

Much of the slowdown can be attributed to last year's Federal government clampdown on mortgage eligibility, which cut the maximum length of an insured mortgage to 25 years from 30. While the tighter restriction shut an estimated 10 per cent of homebuyers out of the market, the measures have added stability to the overall housing market.

The big picture

Over the long-term, all this housing data doesn't mean a lot for the average Canadian homebuyer looking to lay roots.

Statistics show residential real estate prices rarely decline over the long term.

According to the Canada Mortgage and Housing Corporation median prices tracked over any thirty year period show an average annual appreciation of over five per cent.

The CMHC expects that average to hold up even in the current slowdown (if you can call it that).

In addition to price appreciation, home ownership always pays a sort of dividend by freeing homeowners from rental payments.

House payments add up to equity on that long journey to home ownership.

What about now?

If timing is a concern, there's a good argument for potential homebuyers with a decent downpayment and a stable income to buy now. A pause in rising prices could make it an even better time for first time homebuyers.

Now may also be the perfect time to get ahead of rising mortgage rates by locking in. A five-year closed mortgage is currently available for as little as 3.5 per cent and a 10-year closed mortgage is going for as little as 4.5 per cent.

Low mortgage rates mean a greater portion of regular payments go toward paying the principal and not interest to the bank. Bigger payments toward the principal means the mortgage will be paid down sooner.

It's good to carefully weigh the facts when buying a home but in the end it is like no other investment. A home is a place to build and dream. As the years go by it can become a retreat from the world and one of the few things you can truly call your own.