Should You Try to "Time
One problem 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.
Why You Should Not
Plus, this 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 equal
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.