The housing market is on its way to recovery across the country and there are lots of great deals out there. Thus, the question as to whether it’s the best time to guy a home seems like a slam dunk “yes”. But life just isn’t that easy. I’m not saying “yes” isn’t the right answer; I’m saying there are a few things to consider.

Denis Collette via Compfight

One, interest rates are very low. That fact alone should make it worthwhile to look at the possibility of home ownership. But there’s two things you need to consider before you do that: current job security and your credit worthiness.

On the first, you need to feel confident that your current job is secure and that the company is doing well. If you have ways of verifying that then make sure you do it. I did that many years ago, knowing that my position was secure. Less than 12 months later my position and the position of 30 other people was gone in a heartbeat.

On the second, you have to realize that even a couple of blips during the past few years might be enough to disqualify you for the top notch loans; that or an incorrect credit report will mess you up. And not only that, but allowing a creditor to look at your report before you do triggers actions that might hurt your ability to get credit or a good deal elsewhere.

Two, inventory in some states is high, in others not so much. You’re going to get a great deal in Arizona and Florida; not so much in New York and Texas. I know people buying $500,000 real estate properties in Florida for around $125,000; that’s phenomenal. Even building new is offering great deals. But New York overall didn’t have that issue; sure, Buffalo and NYC had some problems but overall the state survived, and the same is true for Texas. You won’t get the same kind of deals, and there won’t be the same amount of homes available. Still, because the market remained fairly flat you won’t have big price jumps in housing either, new or existing.

Three, interest rates are phenomenal. My parents first home came at an 18% interest rate. When I bought my home it came at a 9% interest rate. We were able to refinance some years later at 6%, and right now interest rates are hovering around 3.5%. Frankly, that in itself makes this a great time to look at getting a new home.

Most people don’t understand interest rates so let me give you a ball park figure; don’t quote me on this one since there are other fees that come from buying a new home. For my parents, if they’d had to continue paying the monthly mortgage on their house, over 30 years they’d have paid nearly $833,000 for a $150,000 house. At 3.25%, your payment will come in around $158,000 for a similarly priced house over 30 years.

I’m thinking that saving nearly $670,000 is worth looking at getting a new house while rates are low. If you have everything else in place, the skies the limit.

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