With all the doom and gloom you hear in the press and the instability of financial markets many would be home buyers are anxious about making the big step into home ownership. When prices are falling few people have the discipline to make the jump, but those who do will excel in the long run.
Why Buy Now? Why Should You NOT Wait!
If you were to purchase a home today at $218,900 with a 20% down payment and a 30 year fixed mortgage at 5.5% your monthly payment would be $994.31.
I you wait to buy until the economy recovers - interest rates will have gone up. The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher.
Let's say you wait a year. The cost of the same home in the example above has dropped 10% to $197,010. Unfortunately rates have gone up to 6% on that same 30 year fixed and you still put 20% down. Your payment would be $994.94. IT'S ESSENITALLY THE SAME PAYMENT!
In additon, as the market starts to recover sellers will be less likely to come down on price and inventory will shrink limiting your choices.
So even though the risk seems higher to buy now than to wait to see what happens, this example shows that in reality it's not. This example shows that if you wait a year to buy, you will basically have saved nothing, and spent another year living in a place that's not really yours, and missed another year of the great home mortgage interest deduction on your income taxes.
Now is a great time to buy.