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BUSINESS CYCLE AND BUYING A HOME
you try to "time the market?"
with attempting to time your purchase to the business cycle is that
no one can accurately predict the future. Another challenge is that
interest rates are generally higher during a depressed market and
income may not be keeping up. For that reason, fewer people can
qualify for a home purchase than in more prosperous times.
you should not wait
strategy generally works best for first-time buyers. People who
already have a home usually need to sell it in order to buy their
next one. If a "move-up" buyer wants to buy a home during a depressed
market, that means they usually have to sell one during the slow
market, too. If a seller wants to sell his home to take advantage
of a "hot" market when prices are fairly high, they generally have
to buy their next home during that same hot market.
It tends to
business cycle can change over time. Since 1983, we have had two
fairly long expansions with only a slight recession in between each.
You would not want to wait nine years to buy a home, would you?
You could miss out on a substantial amount of appreciation by waiting,
and end up paying much higher prices.