Quote:
Originally Posted by CroFlames
I would just jump in if I were you. Prices are already favorable. I don't personally view a primary residence as an investment, and so I'd rather be paying my own mortgage rather than some landlord's mortgage. The sooner you start paying down your own mortgage, the better (imo, of course).
If you wait a year and you save let's say $20,000 due to price drops on a home, but you've spent $18,000 on rent during that year, what have you really gained? You lost equity at the very least.
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Let's use your example, a house drops $20k by waiting a year.
Scenario 1: You buy the house now, and build a year's worth of equity via mortgage payments. That is ~$11,000 worth of equity in year 1 of a 25 year $400K mortgage. You also lost $20k in equity due to the price dropping.
Net equity for the year: -$9,000
Interest payments: ~$11,000
Scenario 2: You wait a year. You spend $18,000 on rent. The house drops by $20k
Rent payments: $18,000
So in scenario 1, you are out $20k, in scenario 2 you are out $18k. You also will save around $10,000 on the life of the loan.
Anyway you look at it, financially, it's worth it to wait a year for a $20k price drop.