Interest rates are low, but on the rise. If you are moving up (buying a higher priced home), take in calculation the hit on the sale of your home (as opposed to what you would sell for in a 'better" market), but also take in consideration how much less you are paying for your new home today.
Some other things to think about: Be careful not to get stuck with two mortgages for a long time, and if you do, rent out your old home so you have some income from it.
Think about your job security and make sure you are able to make your higher payment every month.
benefited on both sides, depending on the purchase they made. Remember Interest Rates are Low! When the market is down, you want to purchase, because when the market increases, so will the property prices, interest rates, taxes etc. The housing market is continuing to drop in price and until the employment rate goes back to normal & confidence among home buyers increases, prices are expected to decline furthur. This is a slow drop, that has not reached the bottom in most markets. Eventually of course prices will stabilize but it is hard to predict when. Real Estate has always fluctuated over the years & these declining markets prove the most financailly beneficail to both Buyers & investors!
If this is not a realistic scenario for someone and the need for a larger space is paramount or you must relocate because of a new job and you just cant see yourself as a landlord, then those are issues that dictate selling and buying without any financial gain. Maybe my advice applies more to the larger cities, but I just can't seem to understand the logic of some of these answers.
If you buy, prices will need to increase about ten percent for you to just get your money back in the event you had to sell. On the other hand, if you're going to be in the home for four or five years, so what? If you're a seller, you're pretty much stuck with the market we're in. But you will be buying into the same market.
Mortgage rates are pretty good. If they go up another point or so, prices will probably fall a little.
1) What is your personal financial situation. Do you need the money now, etc.
2) What is your capital gains tax on the sale of the home, if any?
3) Can you afford to take financial risks at this time?
Your question almost sounds like you are thinking of selling now to buy now, we call that a move up purchase. If that is the case, then you should look at the numbers. You might be selling for less than what you think your home is worth. The benefit is that if you are buying a home to replace the home you sold, it might have gone down in value more than the home that you are selling.
The decision to buy /sell now or wait is usually influenced by the type of local Real Estate market you are in. Buyer's markets exist when there are many homes on the market and few buyers. If the number of homes on the market increase, it's likely the days on market number has increased as well. That puts home buyers in a better position to negotiate. Seller's markets exist when there are many buyers competing for a small inventory of homes for sale. This is when you will see multiple offers for one home. When this happens, the home will most likely sell for more than the list price.
Right now, although we are technically still in a buyer's market, we are beginning to see market values rising for homes that are in desirable areas and in great, "move in" condition. Buying a distressed home in poor condition can be a nightmare for the first time homebuyer. They usually require many repairs and special rehab loan financing, like FHA 203K. After touring these distressed properties, buyers tend to recognise why they are better off buying a home in better condition and for a higher price.
Markets can be isolated, or as we call it a "bubble"- properties that have retained their market values and don't seen to be affected by the economy. These are usually more affluent neighborhoods, such as golf course communities, lakefront properties, etc. So, in essence, it all goes back to the property/area.
Making a decision to rent or buy can also depend on many other factors, such as how long you plan to stay in your home. If you are planning on buying a home and living in it for less than six years, you may be better off continuing to rent. Lender fees, Closing costs, taxes and home maintenance are all expenses that come with being a home buyer.
Best wishes to you in your home buying efforts!
Since I can afford my home (paid off) and it would cost me the same to live anywhere else, I'm staying where I am.
The smart thing is to do whatever fits into your current situation in life. Real Estate is not the end-all or be-all with everything......if it will make you happy to move into a new home and a new location than do so.
Please see my blog Is now the time to buy?