REASONS TO BUY
1. You plan to stay in the home for more than five years. If you can definitely stay that long before selling, most economists say you'll probably ride out any economic downturn and come out ahead on price.
2. Prices in the area you are interested in are relatively stable. Either the prices are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like paying the landlord, the relatively small penalty you pay for missing the bottom may not mean much.
3. You are paying your landlord a mortgage payment. If you can afford to pay rent, buying a home can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.
4. You've found the right house for you. The schools are great. You love the area and know it would be hard to find another house like this particular one. In a better real estate market, you would probably have much more competition for that home.
5. You've built equity in your house and are moving to a place where homes are less expensive. In your new market, your money will probably go a lot further, and could determine the best timing for home a purchase.
REASONS TO HOLD OFF
1. You've lived in your house less than two years. Chances are you haven't had enough time to accumulate equity in your home. And, it's possible you may have negative equity, depending on what part of the country you live in.
2. You don't plan to stay in your next house at least five years. While it's not imperative to buy at the exact bottom of the market, it is definitely important to stay long enough to ride it out completely.
3. Your job security is uncertain. If your company or business is struggling or if you feel that a lay off is coming it may be better to stay put until things stabilize.
4. Your credit does not meet lending guidelines or you don't have the minimum down payment. As a result of the sub- prime lending crisis, lenders are much more careful about whom they're lending their money to.
5. You have an existing home to sell in a neighborhood where values are dropping or where the number of foreclosures is rising. In this type of market, you're probably better off waiting until the market stabilizes