No one knows for sure how long the downturn will last. It could be 5 more years, but it could only be 1-2 years. Just because the last downturn lasted 5-6 years, and just because the run-up in prices was sharper this time, doesn’t necessarily mean that this time will be 5-6 years or longer.
Median resale prices have dropped 5-6% so far. There are a lot of people that think they won’t go lower, (which is wrong), and there are a lot of people that think they won’t drop more than another 3, 5, 7, or 10%. They may or may not be correct, but they still want to take advantage of today’s low mortgage rates and are buying as we speak. Not everyone wants to live in a rental for another 3-5 years.
My theory is, if you can afford to buy a home now with a 30 year fixed rate, and if you sincerely believe that you will be able to stay in the house or condo for 10 years or more, you really can’t go wrong by buying in the near future, start paying down your mortgage, posssibly improve your property, and in 20 or 30 years you can live with no house payment.
Who knows where mortgage rates will be in 2-5 years.
