I don't know why you guys think there is so much money on the sidelines. The reality is, by this point nearly everyone who really wanted to buy a house already has. That is why the home owership rate is at an all time high! With the recent lax lending anyone with a heartbeat could buy a house. Who is left on the sidelines? First time homebuyers of course but they are effectively priced out of the market until home prices fall dramatically. The only other group would be those of use who cashed out of the market and are waiting for it to crash. We are in no hurry to buy now. The move up buyer market is drying up because they realy on first time homebuyer to purchase their homes. Speculators are finished.. Who else is left on the sidelines???

 

I actually think that home prices are going to decline for >7+ years. Because as the largest group (baby boomers) head into retirement, they're going to be selling homes to cover all their expenses. It seems like it's going to be a long way down.

That said, if I find a deal on a bigger/better home, I'd probably buy Sorry. I know there is a backlash against mcmansions..But I'll admit. I'm somwhat materialistic…. I do like bigger homes. But I'm just not going to kill my finances over one. 2550 sqft is fine with me right We need a mortgage, because the income taxes are killing us. And will get worse moving forward. Currently with our mortgage and other deductibles, our fed tax rate is about 14%. Without it, our tax rate i think would be closer to 25%. Unfortunately we don't have a side business that gives us additional shelters.

I'm really concerned that my wife and I are going to end up paying higher taxes in our retirement years than now. We are at the lowest tax rates ever. But what our country has to look forward is a broken medicare system, broken social security system, huge national debt, etc…..Someone is going to have to cough up this money..That someone will be us taxpayers. We're going to be paying taxes up the nose in the future. A lot of folks are concerned about inflation. I think the really threat will be both higher inflation and higher taxes . the one-two punch will kill our purchasing abilities.