Timing the Market?

Posted by Danielle & David Contreras on Friday, March 12th, 2010 at 2:13pm.

Is now the best time to buy a home? With today's low home prices, many people may be asking that question. Obviously there are a number of incentives, such as the Homebuyer Tax Credit, that make now a good time to buy. But some consumers may still be wondering if they should wait or if now is the best time to take the plunge.

One way to determine whether the time may be right for you to buy a home is to start looking at the rents in your community. When a full mortgage payment (including principal, interest, taxes and insurance) begins to equal or fall lower than rental rates, the market is typically near the bottom – and that means you'll likely begin to see housing prices begin to stabilize or even head back up. In many parts of the country, we have already seen this occur.

The reality is, no one can time the market perfectly and find the exact bottom. But even if you don't, it's okay. Interest rates are at their lowest in decades, home prices are extremely low, and the government is offering a Homebuyer Tax Credit – and this combination yields the greatest increase to home affordability in years.

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