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

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.If not now then when will it be good to buy house?
~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.If not now then when will it be good to buy house?
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.
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.
U shud buy today only, as tomorrow never comes. Ur demands day by day increases %26amp; so do UR tastes, so better buy this time,
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First of all, congratulations on being one of the few people that is actually thinking about what's going on. I'm concerned with some of the answers that are given here, primarily from Reapor-ted. Yes, he's a mortgage broker, but that doesn't necessarily mean he's right. First of all, when to buy a house in the future? No one knows that exact answer.





No matter what anyone tells you, the U.S. housing market is in a bubble and prices will go down. During the depression home values dropped by 25%. In my neighborhood, houses in like 1999 that sold for $225,000 are now selling for $525,000, a 134% increase in 7 years. This market had all the earmarks of a speculative bubble. People bidding $50 to $70k above list price, bidding on houses sight unseen. Yes, the bubble has popped, but we have only begun to see the ';black death'; of real estate.





If you were buying a house that you and Mrs. are planning to spend the rest of your life in, then now is just a good a time as any, but because you move every 4 years or so, that's going to cause problems. Yes, Reaport-ed is correct in that you can build up equity in 4 years. On a $250,000 mortgage at 6%, you would have built up almost $13,500 in equity in 4 years from your mortgage payments (not including your downpayment). That's wonderful, but that's assuming that everything stays the same.





First of all, if you've been paying attention to the news, the reports coming out nationally is that the real estate market is not doing well and we have only begun to see downturn in the real estate market. What happens if interest rates go up to 8%? The higher the rates are, the less money you'll qualify for. Let's say you buy the house today. In 4 years, if interest rates go to 8%, a person that could qualify for your house today at 6% will may not be able to in 4 years at 8%. Add to that that nominal wages may have increased, be real wages have actually fallen over the past few years. It was just on the news that household income has increased, but no because of gains in wages, but because more family members are getting jobs to make ends meet.





Also, Reapor-ted is operating under the assuming (at least it seems to me) that prices will not drop or will actually increase. Remember what I told you about the depression, that property values dropped by 25%. In todays figures, that $250,000 house would drop in value to $187,500. Let's say you had bought that house with a 10% down and made payments for 4 years, you have $211,500 left on that house ($250,000 minus $25,000 downpayment minus $13,500 in equity from payments). In other words, you'd owe $24,000 more than what the house is worth. If you have to sell because of your job, not only will you not be able to sell for enough to pay off the mortgage, but you'll still owe $24k. Where are you supposed to get the funds for the downpayment on your new home?





I just recently read where a couple that listed their home fo $400,000 and wasn't selling, dropped their price to $270,000, they dropped the priced by nearly 1/3. There was a Story out of Atlanta, where one gentleman bought a home for $108,000 on an ARM about 3 years ago. His ARM has adjusted and now he can't afford the payments. On top of that, he can't sell the house cause the appraisal on it now comes in at $87,000. All he can do is let it go into foreclosure.





I hear the talking heads saying it will be a soft landing. I disagree. So does the CEO of Country Wide Funding. He says that in the 53 years he's been in the real estate business, he has NEVER seen a soft landing.





I can't answer when is a good time to buy, I don't know when the market will bottom out. I have a friend who's looking at buying also, but she is young and will probably sell the house in a few years. My concern for her and for you and your Mrs. is that if you buy now, you may not be able to sell and cover the payoff when you sell in 2 - 3 years. I wish I could be more optimistic, but it's going to get real ugly. And I'm not just going on my own opinions. I've talked to a real estate investor that's been investing in property since the late 60's/early 70's and he's telling me that we'll be able to buy houses for pennies on the dollar soon.





Think about it, inventories of both new %26amp; existing homes are hitting near record highs. Home values are beginning to drop. People are throwing in incentives to entice buyers. One couple in VA is giving the new buyers of their home a 2006 Toyota Camry as an incentive. People are giving away $10,000 vacations, builders are throwing in upgrades at no costs like $30,000 swimming pools. This is all happening, and housing prices have only come down a little.





The Fed did not raise interest rates on 8/8, but I think that's only temporary. Why? First, the Fed is late in it's rate hiking cycle. The other central banks are early in their cycle, and they are raising rates. That's going to put a lot of pressure on the fed. When the stock bubble popped in 2000, the fed cut interest rates to 1% to keep the economy from contracting and hoping investors would get back into the market. They did, but not stocks. They got into real estate. That's way prices skyrocketed in the last 5 years. But, as interest rates increase, that weakens the housing market, which is what's been keeping the U.S. economy bouyant. Now, when the fed began it's interest rate cuts after the stock bubble popping, the dollar went into freefall against the major world currencies. The dollar finally stabilized when the fed began raising interest rates. But, with the U.S. running such huge budget %26amp; trade deficits, the dollar started falling again. When the fed did not raise rates on 8/8/2006, the dollar started to fall again. With the other central banks raising their rates, their currencies are growing stronger, which will entice investors to move their money out of dollars and into Euro's, Pounds, Yen, etc. If the fed doesn't continue to raise rates, the dollar is in peril of facing a collapse. So, what is the fed to do? It's in quite a pickle. If they raise rates to save the dollar, they'll kill the housing market. In the last 5 years, 30% of all jobs in the U.S. have been in the real estate field. A collapse of the housing market would aversely affect 30% of our populations job security. If the fed maintain rates or lower them, they'll kill the dollar. And since America imports the majority of it's goods, that means things are going to get a lot more expensive if the dollar faces a major devaluation. Add to that that a major dollar sell off would prompt foreign investors to dump dollars and dollar denominated assets. Japan alone holds $750 billion in U.S. debt securities. If Japan started selling their bond holdings to cut their losses, that would collapse the bond market and the stock market. And since interest rates move inversely to bond prices, interest rates would spike.





I wish I could give you a simple answer. There isn't one. You're getting killed on taxes, but at the same time, if you get into a house right now, you may not be able to get out of it at the price you want in the next few years. This is not a simple question and there are no simple answers.





All I can say is do a lot of thinking and a lot of research. Pay attention to what's happening. Don't listen to the so called experts as the experts tend to be wrong most of the time. Don't even listen to me. I'm going on what I'm observing, but I could be dead wrong. If you buy a house now, I would suggest you have contingency plans in place in case things get bad and you can't sell when you need to for the price you need to pay off the existing mortgage.
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.
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.
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.
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)
Next Thursday is ideal.