When is The Proper Time to Buy a House

Many people are trying to determine when the proper time is to purchase their first house, downsize or upgrade to a new home.  Before making the decision need to determine how much your current home is worth, understand interest rates are not going to drop below 5.5%, and can I afford the down payment.  If you can afford the down payment, this will help you to build equity.  If not true, you probably need to wait, pay off debt and improve credit score.   Homeowners who are waiting for prices and mortgages to drop will probably be disappointed.  In the long-term prices are not going to drop and if the interest rate drops slightly then home prices will increase faster.  When interest is high, the tendency is for mortgages rates to rise.  When the Fed lowers interest rates, there is no guarantee that mortgage will be reduced.  Also, when fed funds rate drop it does not directly impact long-term mortgage rates, but it does impact short-term rates.  Owning your home has benefits, such as tax deductions for interest paid on the mortgage, and property taxes, etc. Need to make sure you can afford the cost to own a home, which includes having money to pay taxes, insurance and maintenance.  If you can afford to purchase a home now, this may be smart a move now because you have the flexibility to refinance and secure lower monthly payment if rates drop.  Also keep your score above 700 and stay employed so if rates drop you can refinance.    Home prices will continue to rise and each monthly mortgage payment you make creates greater equity for yourself which results in a more solid financial position.  Finally, purchasing a house is an expensive endeavor when you include down payment, closing costs and ongoing maintenance.  Upside of owning your home you increase your equity and increase financial independence.