Daily Dupaco

Thursday, March 03, 2011

The right time to buy...maybe

Home prices in many of America's largest cities have continued to fall, according to Standard & Poor's Case-Shiller Home Price Indices, which measures U.S. home prices. Some analysts predict prices will continue to plummet.

How eastern Iowa home prices will shake out in coming months remains to be seen. According to data by the Federal Housing Finance Agency as published in the Dubuque Telegraph Herald, Cedar Rapids prices were down 0.1 percent last year but up 4.2 percent in the past five, while Dubuque home prices were up 1.3 percent last year and 9.1 percent in the past five years.

Whether you are in the market to buy now, or are waiting it out to see if falling home prices might net you an even better deal, make sure you're honest with yourself about how much house you can afford.

Generally, a monthly house payment should be less than 26% of your monthly gross income and includes your mortgage, property insurance, and property taxes. Your total monthly debt obligations--including house payment, car loans, and student loans, for example--shouldn't exceed 38% of your monthly gross income (Home & Family Finance(R)Resource Center). This standard has some wiggle room; talk to your lender for guidance.

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