Buy a home?
Question: With interest rates and real estate prices falling, I’ve begun looking around to buy a home. Some of my friends think this is a fine idea (“It’s a buyer’s market”); others think it’s financially foolish (“Anything you buy now will lose value. It will be at least a year before the market bottoms out.”) Where do you come down on this question? Lisa, Greenville, SC
Answer: I’m with you. It’s a good time to look. But you have plenty of time. Of course, I have no idea how much lower home prices will go. In most parts of the country there’s still downward momentum. I don’t know how deep the recession will get and how high the unemployment rate will go. Still, the economic environment says there’s no rush.
That said, why not start the process of figuring out the personal finances of homeownership for you? Run the numbers: Is it smarter for you to rent or own? Where is the breakeven point for homeownership? What’s your credit score? Do you have 20% or more to put down? How long do you plan on staying in the home since the longer you live there the better the finances work out–and vice versa.
I’d also use this time to explore neighborhoods. What works bets for your lifestyle? A single family home? A condo? Townhouse? Research, plan, and then when the time is right act. It’s a buyer’s market.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.