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As a first-time buyer, should I wait to until prices go lower to buy a home?
The housing market is currently in a cyclical downturn, and conditions are ideal to purchase a home, especially for first-time buyers. Here's why:
-Interest rates are at historical lows
-Home prices have decreased
-There is a large inventory of homes on the market to choose from
-An $8,000 tax credit is available to qualified first-time buyers who purchase before Nov. 30, 2009.
-Some states are offering special short-term tax credit loans to help buyers with upfront closing costs or downpayments.
The best way to build household wealth is to own a home. Once you become a home owner, you are able to take advantage of the generous tax deductions that homeownership offers, and you begin to build equity in your property. As your property builds in equity, you can use those gains to sell your starter home and afford to move into a bigger house.
With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream starter-home. Instead of trying to buy a 2,000 square foot home, consider shopping for a 1,500 square foot home.
Rents, along with the cost of living, will always continue to climb. So no matter what conditions in the housing market are, the sooner you make the jump from renter to home owner, the quicker you begin to create and build up wealth for your family. After a few years, you will be able to leverage this investment and buy a larger house.
For answers to more questions about home buying, visit www.nahb.org/timetobuy.
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