I feel your pain. I also agree with you that most home prices rebound within 3-5-7 time-frames. But you don't want to be paying a monthly mortgage note that reflects a home that is considerably over-priced in value for those recovering years. Yes, the prices will most likely rebound in time but you will have missed a large chunk of equity by going this route.We're already living the rental life and we're over it. The price of rent is the same as a mortgage but you don't have anything to show for it at the end of the year. I am shaking my head at these prices, however securing a 3% interest rate is a pretty good deal to me. Granted I haven't had any experience with this but just looking at the charts like I would a stock, I don't see a huge drop that wouldn't recover in less than 5 years
We're just tired of paying $1600/mo for a mold filled apartment that you can't park at. Unfortunately there's not much in this price range and rents keep going up. My mortgage should sit right around $2k, there's trade offs to both but we're ready to roll the the dice.
In times like these, there are two problems facing home buyers, The first is inflated prices of course and the second (and more important in my opinion) is inventory. You can insist on buying now and be willing to accept the lost equity opportunity, but in markets like this one, it's extremely tough to find the right home in the right area because of the very tight inventory availability. The best you can do in buying your dream home in today's market is to "settle". Settle on location, settle on a floor plan, settle on the age of the home, settle on the home's lot and finally, settle on the crazy home price. That's just not a good way to buy a home if it can be avoided. If you happen to be looking at new homes in a new subdivision built by a production home builder, some of these problems can be mitigated somewhat. Although that scenario has its own set of problems...lol
By waiting for home prices to fall, you will have a lower mortgage pymt and be closer to the start of equity gains. Nobody can time a market at the exact right moment to enter and see equity gains the next day...ain't gonna happen. Most smart buyers purchase when prices are falling or when prices are in the early stages of a climb or somewhere in-between. The old real estate adage about waiting until there's "blood in the streets" can sometimes work for an professional investor but the average home buyer just has too much emotion in the purchase to play that game.
In my earlier post about renting an "extra nice temporary rental", I was alluding to something better than where you are apparently living now. You mention a monthly rental rate of $1600 and an allowance for your future mortgage pymt of $2000. Personally, I would spend the mortgage amount + in order to get a plush rental that would keep me happy and chase away the "gotta-buy-a-house-now" crazies that are sure to pop-up from time-to-time during this interim period.
Anyway, we've beat this to death...lol...you're young and it's hard to make mistakes that won't be forgiven in relatively short time. Good luck in your search and have fun doing it, it's an exciting time for sure!