Second, during economic decline, there will be far less demand for homes, as people are hunkering down, and because it is more difficult to get loans when times are tough, so it is a buyer's market. There will be a lot of homes available for purchase, and the buyer will have the upper hand in the negotiating, especially if they are qualified to buy a home. You can negotiate for better prices, more amenities, and extra things thrown in, and chances are you will get a good amount of what you ask for. So, because economic declines typically mean housing markets shift to the buyer's favor, you can often get more for less. And, while people will warn you that your home's value may decline as the economy declines, history has shown that in the past 30 years there is yet to be multiple years in a row where home values have gone down. So, while it may drop some, chances are that within a couple of years it will be on the rise again. The last significant decline in average U.S. home prices occurred during the deflationary era of the Great Depression, and while it is possible for declines to occur in inflated markets, putting off buying a house will probably cost you the same amount of money, if not more. So, waiting is not really in your favor.

Helpful Resources: Home Purchase Tax Credit This is a PDF file that offers information about the home purchase tax credit that is currently being offered to those who are buying homes during this economic downturn. It explains how it works, etc. Real Estate Investors For real estate investors looking to purchase, it discusses things like economic decline and how it affects investing in real estate. This is a great link for people wanting to know the pros and cons of home buying during economic decline. Home Buying During Tough Economic Times This is a great site for anyone who has questions about home buying. It offers valuable information about home buying during tough economic times, or at any time during the year. Home Buying Guide This is a guide to buying a home. It explains the advantages of buying over renting, as well as the disadvantages. It also explains many of the things to consider when deciding if you should buy a home. Housing Crash This is a look at how the housing crash is playing out, and what it means to home buyers. It explains many of the pros and cons of buying a home during a housing decline, and economic decline. Considering Home Buying This link takes you to information about the housing market decline, and what you should consider about housing decline when considering buying a home during it. It offers links to other information as well. Existing Housing Market This is a great link for learning about the kind of housing market that currently exists, and what it means to people considering the purchase of a home. It offers updates on equity opportunities as well as a look at struggling markets. Demographics of the Housing Market This is a great site for learning more about the demographics of the housing market decline. This site explains the theories of buying during a housing market decline and how those theories have panned out in the past. Declining Housing Market This is an interesting article about the decline of the housing market, and it speculates that the market will continue to decline, making it a disadvantage to buy now, but an advantage to buy later at the pinnacle of decline. Country Wide This is a great site for anyone considering buying a home. They are a mortgage industry leader and offer some sound advice as well as tools and resources for home buying, and understanding loans, markets, etc.

Third, it is a far less risky place to put your money than most anywhere else, especially since you get value out of it regardless, by having a place to lay your head and hang your hat. Historically, home prices rise steadily even in areas with declining populations and sputtering economies. So, even if your area seems to be seeing a drop in job opportunity and you can feel some of the economic crisis, or recession, there is still a good chance your home will maintain its value, or at least not lose much. Even if your area does see real estate market crashes, the good news is that your home will not be the only one to lose value, which means that you could sell your home, and even if you are in the hole on your mortgage, you would be able to buy a new home for a lower price as well. So, as your home price goes down, so do other home prices. So, if it is not a real estate investment, but some place you are going to live, you can't really lose much.

Fourth, as long as you are smart about what you buy, demand will be high enough that you should be able to get out of it should you need to. In most major markets, even with an economic decline you will see a slight gain in housing, as least in the low priced and mid priced housing range. Obviously an economic decline is not the time to buy a luxury home or a multi-million dollar home, but a modest home, it should post respectable gains. Demand for homes will always be the strongest in the mid to low priced range.

Fifth, interest rates are low. Let's face it, it is far harder to get into a home these days, and far fewer people are trying because loans have tightened up, and the economy is on a downturn, so people would rather not incur debt. However, when the economy is low, it means that less people have money to spend, and more lenders are competing for your qualified business. So, if you can buy a house, chances are you will be able to secure a mortgage with a great interest rate, and awesome terms. Interest rates are the lowest they have been in years, and while the economy is depressed, they won't likely rise a whole lot, so if you can secure a mortgage and lock in a rate, then when the economy bounces back, and rates go up with it, you will be locked in at a nice low number. Most home mortgages are 30 years, so as long as you buy something you can afford, and you continue to make your payments on time, by the time you are ready to move out, or by the time your mortgage is paid off, your home should have regained its value.

Sixth, if drops start to happen, you will be able to get out sooner and lose less if you are worried. Unlike the stock market, housing market declines happen gradually. By its very nature the home market deflates over many months or years, which means that even if it takes you six months to sell, you won't see too great of a decline during that time. Most people do not buy a home and sell it that quickly because they may lose money in Realtor fees and loan closing costs, but it is possible. However, chances are if you buy a home you have plans to stay in it for a while, and chances are by the time you are ready to move, the economy will be back on the rise.

Seventh, currently, the government is trying to help stimulate the economy, and get people to spend money and buy homes, and so they are offering a tax credit for first time home buyers. Basically you can get paid by the government to buy a home. In addition to that, buying and owning a home provides a host of tax advantages. These will differ from situation to situation, but if you talk to your tax professional they may be able to help you see whether or not you would be benefited by buying a home during an economic decline. The interest paid on a mortgage is tax deductible, and can save you a lot in taxes.

Eighth, a home is a durable good. Your money is sunk into a place where you can actually grill a hamburger and relax. So as long as you do not buy a home that stretches you so tight you can't make ends meet, and as long as you practice good financial habits during the economic decline, you will enjoy your purchase.

As you can see there are some real advantages to buying a home during an economic decline. However, please be careful and consider things like layoffs and pay cuts that occur during economic decline. If you bought a home and got laid off, and could not make your mortgage payment, it could hurt your credit, and your chance of getting into a home again. So, when look into buying homes, make sure you can get a loan before you do all the work of checking homes out, and make sure that you buy something modest and affordable. When times are tough, having a mortgage you can barely pay each month, or that you are scraping together is not wise. So, be frugal minded, but remember that a home is a long term purchase, so you still want to purchase something you love and can see yourself living in for several years to come.