As the Market Cools, Is Now
The Time to Buy a Home?

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Sales of existing homes edged up 0.3% in March to an annual rate of 6.92 million units. But the number of homes on the market is climbing: Total housing inventory rose 7% to a record 3.19 million units in late March, a 5.5-month supply.

WHAT TO DO: Home buyers who have been frustrated in their attempts to find new homes now have more to choose from. Home prices have fallen rapidly as the number of homes for sale jumped in once-hot markets like California, Florida and Washington, D.C. If you plan to stay in your home for a decade or more, don't let market conditions dictate when you buy -- housing prices will likely recover from any short-term drop. If you're in the market for a second home, keep an eye on these five vacation spots, where homeowners are already slashing prices. But if you're a first-time home buyer and it's likely you'll move in a few years -- or if you need a riskier interest-only loan to afford a home -- reconsider buying now. If home prices fall and you need to sell, you could owe more on your mortgage than the home's market value.

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