The rule of thumb with common economics is if you can afford it then buy it. If you have to stretch to your last penny then reevaluate where you live and what your needs are.

If you are talking about buying your primary home, I couldn't agree with this more.  Regardless of whether you will lose some money or not, a lot of our purchases are in general not financially sound to begin with. For example, why buy say a a performance car when you can buy a Hyundai.Etc,etc.etc, knowing that almost all cars depreciate exponentially the moment you drive off the lot? Some do it for status (dumbest reason imho). Others do it because they can't stand driving an appliance that handles like a boat. What "price" you put on the intangibles is really a personal choice. So it really depends on if you can afford to purchase without overly stretching, your own tolerance for the intangible naggings, and your ability to live/weather if your home falls below what you paid for. On the other hand, if you're considering a home purchase as an investment, well I  personally wouldn't recommend this right now too.

Another thing, a lot of people are hoping for a 50-60% correction. I'm hoping for some sort of correction so that a home makes sense to be an investment again. But for me, I don't look forward to a 50-60% correction if it were to actually were to happen.I would guess that very few people would (1) have the financial means (2) be pysicologically fit to make a purchase at those levels. Humans tend to move in herds. If the sky is falling, most people will continue to think it will continue to fall. If housing is soo bad, and umemployment is so bad, and your neighbors are closing shop or losing their jobs left and right, would you have the stomach to make a big purchase at that time? What makes you think you would be in any different shape than those around you? And if you're planning to buy a home at the bottom, how's that different from trying to predict when the bottom will hit in say the stock market.  Few people will be ready when the bottom comes, most still won't buy.For example, when the stock market crashed after 9/11, I'd be curious how many folks got back into the market when things were near "bottom"…