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Recently we had a baby and planning to buy a home. Is now a good time to buy a home? In my area houses are around 650K. I have the following questions.

  1. Is it good time to buy a home?
  2. Interest rate mortgage companies are charging @ 5-5.25%. Is it high?
  3. Is it really worth it or stay in a rented home?
  4. Mortgage company asking us to put 72K down payment but we have only 20K. What should I do now?
puzzled
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Test
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    Where are you located? – Nosjack Apr 10 '20 at 15:20
  • SanFrancisco, California – Test Apr 10 '20 at 15:22
  • Or this? https://money.stackexchange.com/questions/2075/in-general-is-it-financially-better-to-buy-or-to-rent-a-house – yoozer8 Apr 10 '20 at 17:15
  • Whoops, just meant to post that as another potential duplicate forgot that it would close automatically. – Hart CO Apr 10 '20 at 17:48
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    This question is impossible to answer without knowing your income. Can you afford buying a house ? 20k isn't a lot and you definitely shouldn't buy a house until you have a bit more than that – xyious Apr 10 '20 at 18:18
  • We're in a recession. Home prices decline during a recession, sometimes moderately, sometimes severely (see 2008). Coincidentally, my nephew called me a week ago and he and his wife are on the verge of buying a $500k home. I suggested that he wait. Home prices are not going to melt up. At worst, they'll stagnate. It's not like it's a one of a kind rare painting. There are always going to be homes available. AFAIC, the one exception to this might be if you have found a distressed property selling for well below the market. – Bob Baerker Apr 10 '20 at 18:39
  • Thanks @BobBaerker I am planning to wait. I am confused here, if we are in recession how come the stocks and real estate market is going up and up? How buyers are buying for this huge price? – Test Apr 13 '20 at 16:34
  • @Test - In 2008-09 when the DJIA dropped from 14,000+ to 6,500+, there were two days in October '08 when the DJIA rose over 1,000 points. That's over a 13% gain on two different days in the same month. The market can rise during a bear market. If it's a short term rally after a hard selloff, it's called a Dead Cat Bounce. My guess is that the $2 trillion in stimulus and $4 trillion of Fed liquidity is buoying the market with the expectation that such unprecedented largesse solves a shuttered economy. I don't see it. Either way, home prices take time to react. – Bob Baerker Apr 13 '20 at 17:08
  • 16 million people just lost their jobs and likely, more job losses to come. A $1,200 stimulus check and maybe $600 a week in unemployment isn't going to pay the rent and that's assuming that it begins arriving in a timely fashion. It won't because the government is inefficient. Some will slip through the cracks. Some states have barred eviction for a period of time if rent not paid. How will landlords not receiving rent be able to pay their mortgages? In such a scenario, do you see home prices rising? If anything, likely to go down. – Bob Baerker Apr 13 '20 at 17:09

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