"Money File"-How Best To Buy In This Housing Market

SUSIE GHARIB: In the "money file" tonight, why waiting for a bottom line in the housing market before buying could be a mistake. Here's Eric Schurenburg, managing editor at "Money" magazine.
ERIC SCHURENBERG, MANAGING EDITOR, MONEY MAGAZINE: Why on earth would anyone buy a house these days? You know the price is only going down. According to the upcoming issue of "Money" magazine, the average American home is likely to be 10 percent cheaper this time next year. Isn't the obvious thing to do to wait? Well, yes, it is the obvious thing. But it's not the only smart thing.
There are, believe it or not, a couple reasons buying soon might turn out to be a good idea. First, forecasts are just forecasts. About the only thing certain about the rebound in home prices is, it will come when most people least expect it. In the meantime, this is the best buyers have had it in decades, with sellers desperate and mortgage rates low. So what if you buy before prices hit absolute bottom? Right now you have the leisure to find the home of your dreams and the power to drive a hard bargain. And if you can get that home for say, 10 percent below comparable sales, chances are you'll be pretty close to the bottom anyway.
Second, while homes will probably still be cheap next year, mortgages may not be. Mortgage rates reflect expectations about inflation, and there are reasons to worry there. At today's 6 percent fixed mortgages, a $1500 monthly payment gets you a $250,000 loan. If rates go up to 7 percent, that same payment nets just a $225,000 loan. Now, I'm not claiming to have a crystal ball. That's the point. No one does. But today's market gives you a rare opportunity to find exactly the house you want and to demand a price you can afford. That's what buying a home is about, isn't it? I'm Eric Schurenberg.