If you have the financial wherewithal and tolerance, now is a good time to make an investment in home ownership. If you already own a home and you haven't taken advantage of the low interest rates, now is an excellent time to refinance.

From the mid 1990's until 2006 it was a 'sellers market' as home prices kept rising. This led homebuilders to a binge of new building and people to become 'investors' buying multiple homes to make what seemed to be a guaranteed profit.

Many people started to use their home like an ATM by taking out one or more home equity loans. Some of these loans were used as down payments on another home, to pay for college for their children or to purchase other goods. As a result, home equity is at its lowest level since the Great Depression.

A decade of reckless finance culminated in debt that we, as taxpayers, must and will carry for the foreseeable future as bank bailouts and the debt of Fannie Mae and the Federal Home Loan Mortgage Corporation.

So, is now a good time to buy a home?

Homes have served a dual purpose in the US for a long time. The first and most important role is to provide shelter. From that perspective, the choice to purchase or rent a home is a personal one that is driven by the comfort one derives in being an owner versus a renter.

The second purpose of a home is as a store of wealth. Until the late 1990's, the home had been the number one vehicle of wealth for Americans. We held more 'value or equity' in our housing than we did in any other form of investment (stocks and bonds). That changed in the late 1990's as the 401k, 403b, and IRA helped investable securities pass home ownership as the number one driver of wealth.

But, that was only temporary.

As the stock market declined after April 2001 and the housing market continued to grow, home ownership passed investment savings in late 2001, and when the stock market collapsed and home ownership once again became the top store of wealth.

The volatility that we have witnessed in the housing, equity, and bond market have made it difficult to determine what is the best store of wealth today and what it will be in the future. But, a home serves dual purposes and one would expect that over time it will gain in value.

People often try to pick the top or bottom of a market whether it is stocks, bonds, or housing. However, it often makes more sense to look at the risk and return that you are comfortable with – and given the last couple of years you should have a pretty good idea what real risk is – as the driver in the decision to make any investment.

From a risk and return perspective, the housing market is well off its peaks, interest rates are at historic lows, and new building is at a very low pace.

Now could be a very opportune time to make an investment in home ownership.

Mark Stys is Bluemont Capital's Chief Investment Officer. You may contact him by email at: mstys@bluemontcapital.com.