Prices are Great, Should You Buy or Wait?

With home prices on the decline, you may be wondering whether now would be a good time to buy a home in Phoenix. Interest rates are low, and housing is more affordable than ever. Should you buy now, or should you wait to see if housing prices drop further? Timing the market to wait for the best home prices is practically impossible, unless you can foretell the future. A better measure of whether or not it is the right time to buy a home in Phoenix is to do a quick check to see if it is the right time for you to buy a home or not.

Is Your Job Stable?

The weak job market is one contributor to the inexpensive home prices on the market right now. Some industries have been hit hard by the recession, leaving businesses with the tough decisions of cutting employees and their hours. If your job has been threatening layoffs, cutting hours, or has been giving you any hints that you might need to look for a new job soon, it's probably not a good idea to purchase a house. You would probably be better off investing your extra time and money in preparing for lean times. If your company seems to be financially healthy and you have savings built up in case of an emergency, now might be a great time for you to buy.

Would a Home Purchase Leave You House Poor?

During the real estate bubble, people of all walks of life sought to buy houses, whether they could reasonably afford them or not. Although owning a home is the dream of most Americans, you don't want home ownership to turn into a nightmare. Air conditioning systems break down, plumbers need to be called, and roofs sometimes need to be replaced. When you are renting, these expenses are generally covered by your landlord. As a home owner, you will have to pay for these expenses yourself. If you have little wiggle room in your budget for miscellaneous expenses after you have paid the bills, mortgage, homeowner's insurance, and taxes, purchasing a house might leave you house poor. Keep in mind that taxes and insurance can go up. If purchasing a home would make you house poor, you might want to hold off on purchasing a home.

Do You Have Money Saved?

The more money you have in savings, the better prepared you are to be a home owner. A larger down payment will equal lower payments for you, and will decrease your chances of becoming upside down in your mortgage at a later date. If you can afford to put twenty percent down, you won't have to pay for private mortgage insurance (PMI). In addition to saving money for your down payment, you should have some money set aside for emergencies. At the very minimum, you will want to have around $1000 set aside, in case your car breaks down, you need to call the plumber, or some other emergency comes up. It would be even better if you had three to six months of expenses saved up, in case you lose your job (in this economy, you may want to opt for a little more). The more money you have saved, the better prepared you are to become a home owner right now.