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
Wait
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 out.
Finally,
the 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.
