If not now then when will it be good to buy house?

Question

My wife and I planned to buy our first house in late 2004 then increasing home price in 2005 put us out of market. Now the market is slowing down as price starting to drop (comparing to the peak in 2005). We now have enough money for down payment and make more money to handle the mortgage. We feel that the longer we wait, the further home price will drop. But we are losing money in tax as we have been in the 30% income tax bracket. Thus, owning a house will give us some tax break. We are planning to buy before the peak time of next year (i.e. 2007) but we are not sure if the housing market will ever peak again in 2007. We are wondering if we can wait then when will be a good time to buy. We have very low rent. We are young and we will most likely not be in one house for more than 4 years due to the nature of our professionse. That is, we will be selling the house 2 or 3 years from now. Your opinions are greatly appreciated.

Answer 1

~duh. 30% tax bracket and looking to Yahoo Answers for finacial advise? PT Barnum was right.
You're question is a little incomplete.
Price range?
Location?
Rental/residential hybrid property?
Tax advantages?
Wiser investment possibilities due to your short term plans?

As my crystal ball isn't due back from the shop for another few days, I can't really tell you that much about the economy other than that it can only improve once Georgie the Younger leaves office and the bible thumpers stop controlling Congress.

Answer 2

It depends on why you want to buy a house. In most cases, leasing is actually the best financial short term approach while buying is more efficient over the long term.

Many people choose to buy a house to have independence to live the way they want or where they want. In this case, I would suggest go ahead and buy now. Timing the market is nearly impossible as with all markets.

If it is a financial play, then the tax break sound great, but if you compare it to all of the additional costs you will have (e.g. real estate commissions, closing costs, maintenance, property taxes, interest, furnishings, moving, etc.). It will be hard to recover this in a 2-3 year time frame.

Unless you know the market very well and can see a great deal you know you will be able to sell when you need to move, I'd strongly suggest you continue renting. Run the numbers and see what the break-even point is on a buy versus lease where in the buy your rate of appreciation is 5% and in the lease case you put the cash you are not putting into the excess ownership costs in to the stock market at 10% and I think you'll see it take 5 to 7 years. More importantly, you know you will be moving and don't want to get caught with a big loss if timing works against you.

Answer 3

Maybe I'm biased, or just wishful thinking, but wait another year or two.
By the time you wait that long, you might have to move too soon to make it worthwhile!
Consider retirement plan contributions to lower your taxable income, but don't buy a house short term just to reduce taxes because you'll just end up blowing the savings on transaction costs (the buy, sell, then buy again within 2 years).
I found some useful tidbits at the web site below that actually give some pros for renting. (I am not associated with that site, just noticed it is different than much of the other info out there)

Answer 4

seeing how you'll be needing a mortgage know this; the rates for mortgages are rising and will continue to do so for the next several years, you can be sure of that. knowing this and trying to make your housing purchase coincide with the leveling off of the mortgage peaks is folly. won't happen. let's say you DO wait until the rates stop rising and then buy your house. or wait until the rates drop and then buy your house. either way you'll pay more then than you will now or the beginning of next year. right now the par rate is around 6-6.5 percent. that's with A+ credit. assume the next couple of years, this par rate will surely get to the high 7 and low 8's. wiating for it to drop may take years and even if it does, it'll only drop maybe around 1/8 a point or a quarter point. at which point you'll be paying maybe 7.5 percent. you can see that by waiting you're paying an extra 1-1.5 percent extra in finance than you would if you had bought the house earlier. House pricing is crucial, yes. but really what makes the difference is the mortgage. You don't pay all at once for the house right? but you will on the mortgage. so whether or not you pay 200k or 250k on your house is not that big a deal wehn you figure everything else in. since this is your first house with you and wifey, will it be your last? will this be the house you grow old in? perhaps not. point is, whatever you buy the house for is irrelevant sincem, assuming you live in a decent area, the equity that will build up in the house will more than pay for the mortgage as well as increase your bargaining chip for when you decide to buy THEE house that you'll grow old and retire in. since it's you first house you shouldn't be that worried about the market or if the price will go up or down. obviously it does matter but the mortgage that actually secures that house for you is what's crucial. honestly, don't wait. just get the house that you like and since you'll only be there for a max of 4 years, that's still enough time to build up equity in the house and apply it towards the purchase of your newer house. since you'll only be there 4 years max, there no point in the price of the house really since you will plan on selling only after a short amount of time anyways. you NEVER payoff the mortgage on your house unless it is the house you intend to grow old in. otherwise, your house if the most valuable bargaining chip one can possess. get it and use it effectively and you won't have to worry about the market that much.

Answer 5

Buying depends on where you live. In some areas, you may see some price drops, but in other areas, they are just going to level off or go up about 5-10% a year depending on the market. In general, you will always need to stay in your home for at least 5-7 years before you see a good return on your investment. You have to consider the costs to prep the home for sale and then the realtor's commission. If you only plan to stay in a home for 2-3 years, I would advise to not buy unless you plan to keep it and rent it out. If you plan to wait, then prentend you already bought and put away the difference in rent you are playing and the mortgage (inc. tax, etc.) in a high yeild savings account.

Answer 6

First of all, DON'T CHASE A MARKET!!. If you are buying the house to live in anytime is a good time. If you are buying it for speculation to sell you sell a house when you buy it. What I mean is you have to buy it at the right price to begin with.

Because you are going to live in the house, buy when you find the house you like and you can afford it.

Answer 7

My advise for you is to buy a house now. It's a buyers market right now and with a good agent you can really haggle down the price.

Try to buy something thats not extravagent and something that would be easier to sell in 5 yrs.

With that said no one can predict what the market will do in the future, so just buy a house and get the tax break.

Answer 8

"to construct a house or a inn, the participant could own all homes in a colour team. progression could be uniform for the time of a monopoly, such that a 2d living house can not be outfitted on one resources in a monopoly till the others have one living house." I were provided that from Wikipedia. I have performed this interest in view that i became a touch newborn, and that i have performed diverse recommendations with diverse human beings. each in certain situations we performed like your mom is describing. different situations we may purchase even with lets have the funds for, yet you could not placed a 2d living house on a resources except all the different homes have one living house already on it (like Wikipedia says). wish this helps.

Answer 9

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Answer 10

U shud buy today only, as tomorrow never comes. Ur demands day by day increases & so do UR tastes, so better buy this time,