Few of us are going to predict a return to the irrational home price appreciation numbers of 2000 through 2006.  But, few would argue that the "American dream" of home ownership isn’t alive and well.  Most of us still want to own our own home.  And, our home style and size needs change over time.  So, it’s reasonable to assume that the markets will stabilize at some point, inventories will come down, and prices will begin to rise again.  As long as other costs, such as materials and fuel, continue to rise, so will the cost of building a home, and thus the selling price.

The home price indexes have stabilized a bit, with the monthly decreases slowing in many areas, and even turning to the positive side in others.  So, if we think the worst is over, should we buy a home now?  The fundamentals of a home purchase haven’t changed.  Do we need to buy a new home, whether it be for up or down-sizing?  Or, we may be relocating for work.  Maybe we’re doing well, and we just want to buy a larger home or one in a more desirable location.  Let’s just say that our first consideration is the "why" of buying.  If we have a reason that suits us, then let’s move on to the timing issue.

The expectation of price appreciation in the next five years should not enter into your decision.  It just may not happen.  So, if you don’t expect to keep the home for five to ten years, at least be prepared for the fact that you may lose money at resale.  The costs to sell a home can easily eat up a small appreciation in the short term.  Being very careful in the selection of neighborhood can have a great influence.  Paying a bit more for a home in a growing and in-demand area can return positively on your investment.In short, if you want it, can afford it, and you can stick with it for a while, it’s a great time to buy a home.  Low prices and historically low interest rates don’t coincide very often in history.