Housing prices are very closely tied to income, in fact almost always 3 times average income, that puts average house price in Merced around 120K (even including the UC effect). They will be there in 2 years for sure. So hold off and save 100K! Wait till you see rents start to go up first. Right now it is way way cheaper to rent.
Based on your gross annual income, you want to spend no more than GAI times 3 to arrive at a purchase price. Because rents are relatively low here, you also want to look at what a comparable property would rent for, multiply by 150 and see if that is in the same range as your price. If not, reconsider the property until you find one that meets both criteria.
Before you start looking for a home. You must sit down with a loan officer and figure out how much you can afford. They will check your credit scores and history. The loan agent will give you a rough estimate of the taxes and fees involve in purchasing a home. After that, they will give you a Pre-qualification letter or a Pre-Approval letter stating the amount of what you qualify for. Now, a good loan agent will explain every little detail to you. So make sure you ask a lot of questions and are comfortable with that loan agent.