The current economic downturn and credit crisis has left many asking this important question. Real estate prices are down, mortgages are still available for folks with good credit and, at some point, the economy will begin to flourish again. So, should people take this opportunity to purchase a home now that there are growing numbers of short sales, foreclosures and folks selling homes they can no longer afford?
Homeowners are losing their homes to foreclosure, layoffs continue to increase and individuals who were once prosperous are claiming bankruptcy in record numbers. Because of this, it is more important than ever to assess your particular situation and make sound financial decisions based on reality. Part of the issue with the rising numbers of foreclosures and bankruptcies is the rampant tendency for people to live well above their means. Another influence on the number of foreclosures is that homeowners took advantage of generous mortgage practices that extended credit to hopeful homebuyers who either did not consider, or did understand, how the current and future payments compared to their current and projected income.
Therefore, prospective homebuyers with good credit, steady employment and a good understanding of their personal financial situation and how much house they can actually afford should absolutely take advantage of the current real estate market and purchase a primary residence or investment property. Those who do not fit these three requirements should work to improve their credit and financial situation with the goal of purchasing a home as soon as possible, hopefully before home prices begin to rise again.