Good points made by Jennifer and Jacob. Remember that mortgage guidelines recently changed in the past 18 months with the influx of foreclosures, etc. Back in the early nineties people said they were going to rent existing home in order to buy another home, as soon as escrow closed they moved out of other property where value had dropped and let it go back to the bank, usually without even attempting to rent out, etc. Now you must have 25% equity in your current home to not have mortgage payment be counted against you. Otherwise, proposed mortgage payment and existing will be counted against you in qualifying. This is what has kept some out of the market. Decide what the motivation to purchase is. As an owner occupant, investor, etc. Good luck!