The economic turmoil has brought along with it times of extreme financial uncertainty.
People who have spent the better part of their lives working for blue chip companies and fundamentally strong establishments cannot be sure if they will be able to hold on to their jobs for long.
However, another facet of this story is the declining real estate prices, which makes this a good time to invest in a home or to build a home.
Yet many people argue that this may not be the right time to build a home.
So let's analyze the factors that stand against and in favor of this argument.
One of the primary considerations that will determine the financial sensibility of your decision to build a home will depend on why you are purchasing the home and your current financial condition.
Why build a home? The fact that real estate prices have plunged across the country means that if you can afford to build a home at this point it will be easier on your pocket than what it would've been a few years ago.
Also since the slow down in the real estate industry had rendered many technicians, contractors, electricians, plumbers and other professionals' jobless or with limited amount of work; most of these people will be willing to negotiate heavily to get a new job so you could save up a lot on the construction cost.
If you intend to build a home to live in or as a second home or an investment home; building a house right now could equate to major capital gains in the future.
There are several foreclosure properties and short sale plots which can be bought for hefty discounts.
Also, prices have hit rock bottom in several urban areas of states like California, Arizona and Florida so you could buy a home in the heart of Sacramento for a really affordable rate.
Why You shouldn't Build house now? If you are going to avail typical financing options to buy the house, this may not be the best time to do so.
With most lending institutions being extremely cautious you will need nothing short of a perfect credit rating to get a loan.
Also, most lending institutions will expect you to put in a 20% down payment and if you don't have that kind of liquidity sitting in your savings account and if you intend to take a personal loan or credit card loan to pay this amount you need to absolutely sure that you can hold on to your job.
In this day and age of uncertainty it will definitely be risky to take a second mortgage on your existing home to buy a new house.
Given the fact that the economic situation shows no signs of improvement you may find it fairly difficult to find a renter for your property and even if you do, you may not be able to get the expected rent which will sustain the expenditure of your new home.
Many analysts are suggesting that the real estate market hasn't bottomed out yet and there is still scope for further price reduction.
So considering all the factors it would make more sense to wait and watch for a while and not build your home right now unless you have ready liquidity.