With low prices and rates, is buying at the upper range of your budget a better investment?

[Heiwos]

Originally Posted by glenn_1000

So I was wondering if it is wise to get more bang (larger house with more features) for the buck while the prices are so low?

Of course "low" is relative. Prices in most places are still a lot higher than they were in 1995, when I bought my last house, yet the economy is in way worse shape now than it was in 1995.

Other than the good advice above, I suggest you think hard about the opportunity cost of buying a larger house. Say you pay $10K more for a bigger garage. That's $10K plus 30 years' of interest, probably always higher property taxes, and more roof to replace someday. Maybe $30K total in today's dollars. Add in interest you could have made on that money, subtract the $10K the extra garage is worth when you sell, and you might have to work a few months longer before retiring. (The house may appreciate, but historically not at a higher rate than inflation in most places.) So, in this example, would you rather have more garage space for stuff, or retire a few months earlier?

IMO the best feature to pay extra for is location. No more house than you need, in the best location you can afford, is the best housing investment you can make.