Let me put some number to this:
1. Your decision is not simply whether to buy a house. Its rent vs. buy. Rates are at historical lows so a conforming 30 year mortgage is about 4.75% - 5%. Say your starter home is 90k and you put down 10k down payment, your monthly payment is $420 (no stoner joke intended). So ask yourself, am I able to rent a residence of this quality for this price. Even if you are consider after 30 years, you have 90k in equity and a free residence if nothing moves in the housing market. Also consider the interest component of your monthly payment is tax deductable.
2. Will this property appreciate? If you believe markets are stochastic, it's a crap shoot leaving you with a 50/50. However housing is a little different, because it is always worth at least the prepetuity value of rent payments. So say you are able to rent this sucker out at $500/mo. At the current interest rate environment, your value is $120K. So unlike a stock, value will never drop to zero. Second due to continuous population expansion, real estate will become more scarce, leading to value creation.
3. From timing presecptive, rates will not go much lower than the current levels even in a double dip scenario. Housing already suffered a huge decline, even in a double dip, due to the reasons list above, i question how much further it could fall.
So in summary, i think if you could get into a house for 90k and be happy with the place, is its a great opportunity.
1. Your decision is not simply whether to buy a house. Its rent vs. buy. Rates are at historical lows so a conforming 30 year mortgage is about 4.75% - 5%. Say your starter home is 90k and you put down 10k down payment, your monthly payment is $420 (no stoner joke intended). So ask yourself, am I able to rent a residence of this quality for this price. Even if you are consider after 30 years, you have 90k in equity and a free residence if nothing moves in the housing market. Also consider the interest component of your monthly payment is tax deductable.
2. Will this property appreciate? If you believe markets are stochastic, it's a crap shoot leaving you with a 50/50. However housing is a little different, because it is always worth at least the prepetuity value of rent payments. So say you are able to rent this sucker out at $500/mo. At the current interest rate environment, your value is $120K. So unlike a stock, value will never drop to zero. Second due to continuous population expansion, real estate will become more scarce, leading to value creation.
3. From timing presecptive, rates will not go much lower than the current levels even in a double dip scenario. Housing already suffered a huge decline, even in a double dip, due to the reasons list above, i question how much further it could fall.
So in summary, i think if you could get into a house for 90k and be happy with the place, is its a great opportunity.