Back in March, we reported on the remarkable story of Willow Tufano, a 13-year-old who went partners with her mother to purchase her first home. Willow antied up her fair share with money she saved for over a year by selling free items she had previously found and fixed up. We are writing today to let you know that Willow just purchased her second home!

ABC News covered the story last week. In the article, they caught us up on the escapades of this exceptional teenager:

“She’s been on ‘The Ellen DeGeneres Show’ where the host gifted her $10,000 to spend at Ace Hardware, in addition to a new clothes dryer. She’s been interviewed by ABC’s “World News” and NPR and even for a television show in South Korea.”

Her goal? To purchase 10 homes by the age of 18!!

See a video of Willow here.

With sales and prices increasing in most regions of the country, it looks as though housing recovery is in full swing. There are more and more housing analysts declaring that we have turned the corner. A recent article on money-rates.com explains that now may be the time to act if you are thinking of purchasing a home.

“Right now, conditions for buyers are exceptionally good, because current mortgage rates are at record low levels, and housing prices are still well off their peaks. Already though, recent numbers indicate that housing prices are starting to move. If this continues, mortgage rates might follow. In particular, if lower-end housing prices are now making the strongest gains, people looking to enter the housing market for the first time should prepare to act.”

Others Are Also Calling a Bottom

In a Chicago Sun Times article, co-creator of the Case-Shiller home price index Robert Shiller agreed saying that, even though there are still questions in the overall economy, “it’s a good time to buy a house”.

Ivy Zelman, chief executive at research firm Zelman & Associates, has also said:

“[Housing] is turning positive and we see the data reflecting that.”

Writing in the Financial Times, Roger Altman, former deputy Treasury secretary, said:

 “A turn in the [housing] market is occurring now and it should become a boom by 2015.”

And Jamie Dimon says the U..S housing market has “turned the corner” as JPMorgan Chase and Wells Fargo, the two biggest US Banks have seen a surge in mortgage demand. He also warned that interest rates would “probably” rise “sometime in 2013”.

What Does That Mean to You?

If you have been waiting for the bottom in real estate prices, it seems your time may have arrived. As the Money-Rate article concluded:

“The housing market may be better off than people know. As many found out during the housing boom, waiting until everyone knows the market is healthy before you buy can be an expensive proposition.”

InfoGraphic

Based on NAR’s September Existing Home Sales Report

Trulia reported this week that homeownership is 45% cheaper than renting in the United States. Jed Kolko, Trulia’s Chief Economist explained:

“Homeownership is cheaper than renting in all of the 100 largest metros, by a wide margin. Despite the recent price rebound, rents continue to rise faster than prices, and mortgage rates are near record lows.

Homeownership makes the most financial sense for people whose strong credit scores let them snag the lowest mortgage rate and who get the biggest benefit from deducting mortgage interest and property taxes from their income taxes.”

(Trulia’s methodology is explained here.)

This news did not come as a surprise to us as we have reported that today’s rental market definitely favors the landlord. Below is a graph of how rental prices have increased recently and where they are projected to go over the next few years based on a report from Marcus & Millichap.

It cost more to rent than own right now. And you don’t get any of your rent back in the future. History shows us, in the long term, you can build equity in a home. Dr. Ken Johnson earlier this year explained in a post on this blog:

“It appears that homeownership creates extra wealth mainly through its ability to force owners to save rather than through property appreciation. Thus, homeownership appears to be a self-imposed savings plan, which through time leads to greater wealth accumulation as compared to comparable renters. In short, buying a home makes Americans save.”

The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:

“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

What Does This All Mean?

We believe David Shulman, senior economist with the UCLA Ziman Center for Real Estate said it best:

“The American Dream of homeownership may be comatose, but it is not dead, and the wake-up call will come in the form of higher rents.”