Q: Should I wait until home prices go even lower before I purchase?

A: No. Just as no one can accurately predict the peaks and valleys of the stock market, the same holds true for housing. If you wait for what you think is the absolute best deal, you could end up waiting for years. All the market fundamentals show that now is a good time to buy. Prices are down, interest rates near historically low levels, and there are many homes to choose from.

If you buy now, you will not only be in the drivers seat during the buying process, you will also reap the gains of price appreciation. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.

Q: Should I wait out the market until can I get the same price on my home neighbors got when they sold two years ago?

A: No. It is always better to trade up in a buyers market. While the value of your house has fallen, the prices of higher end homes have also dropped. Here is an example:

Your neighbor sold for $300,000. Assume values in your area have dropped 10 percent, so you could get only $270,000 for your home today. You have your eye on a move up home that previously sold for $500,000, but now is selling for $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000.

But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are the move up home would also increase in price 10 percent to $500,000. That is a $200,000 price difference. So by selling today, you would actually save $20,000.

Q: Interest rates are going down. Should I wait until they go even lower before I buy a home?

A: Interest rates for 30 year, fixed-rate mortgages are currently below 6 percent and are extremely favorable for buyers. In fact, they are hovering near 30 year lows. But waiting to time the market is a dangerous game. Even those who follow the market for a living cannot figure out when interest rates will bottom out. If they could, they would all be millionaires.

And home prices do not necessarily move in unison with interest rates. So, if you decided to wait to purchase a home and the price dropped $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up by a half a point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.

Q: I have $10,000. Should I put that money in the stock market or buy a home?

A: Purchasing a home is by far the best long-term investment. For example, say you use that $10,000 to purchase a $250,000 home, and the house appreciates a modest 3 percent during the first year. That means after one year, the house would be worth $257,500 or a gain of $7,500. By contrast, putting the same $10,000 in the stock market and posting a similar 5 percent gain would only net a $500 return on investment.

And remember the tax incentives. In most instances, all mortgage interest and property taxes paid in a given year can be fully deducted from your gross income to reduce your taxable income. These deductions can result in thousands of dollars of tax savings, especially in the early years of the mortgage when interest makes up most of the payment.

Q: I am buying my first home but cannot afford the home that I want. Is it best to keep renting and hope that prices will get even lower

A: If you continue to wait, you may never be able to afford to get into the housing market. Even as home prices are currently moderating or falling, depending on where you live, rents continue to climb. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30 year, fixed rate mortgage.

Once you become a home owner, you are able to take advantage of the tax deductions that home ownership offers, and you begin to build equity in your property.

With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream starter home. After a few years, you can use those equity gains to sell your starter home and move into a bigger house. The sooner you make the jump from renter to home owner, the quicker you begin to create and build up wealth for your family and enjoy pride of ownership.