How to respond to falling home prices?
If you are worried about the slowdown in the housing market, here are tips on how to go about evaluating your options if you currently live in your home:
- Your primary home is not an investment property. While any appreciation is welcome, you need to change your mindset and consider it as your residence. Merely owning your home gives you your own place to live and collect all the tax benefits from the IRS.
- Ups and downs are part of the housing sector. Historically, prices have always gone up. Even in the short term, in 2005, the prices rose 12% in 2005 and 9% in 2004.
- You cannot time the market. Even stockbrokers do a terrible job of timing the stock market.
- If you can make your monthly mortgage payments, just keep doing it, and do nothing else. Since builders have canceled most construction projects, demand will overtake supply within a matter of months (not years).
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