In days gone by, purchasing a house was a solid financial step in the right direction, an unquestioned investment in future economic security, and a guaranteed piggy bank of wealth accumulation. But what about today? Times have changed, prices are much higher, inflation seems to have disappeared, and the question must be asked out loud: Should you be buying a house?

The answer is not a simple one. During the 1970's (and even well into the 1980's), residential real estate was a blessed investment. It seemed you could buy any house and always be able to sell for more later. With values going up 10-15% yearly, it was crazy not to buy a house.

But today you can't be sure that property values will even remain stable, much less increase. Some recent buyers, especially in the condominium marketplace, have seen their property values drop significantly in recent years. For a combination of reasons, home ownership has lost some of it's luster. And even though we are looking forward to the end of the recession, there is no guarantee about the future.

So how can you know if buying a house still makes sense for you? The question can be answered by shedding light on the current situation and asking yourself a few questions.

Do you have a steady income and money for the downpayment?

Do you recognize the responsibilities of home ownership?

Do you plan to stay in the house several years?

If you can honestly answer these questions with a "yes," then and only then can we proceed to benefits of buying now...and there are several.

a. Historically, owning your own home has been one of the primary means of accumulating wealth in this nation. Real estate is a slow, steady performer, rarely giving a dramatic return, but increasing in value consistently over the years. It works because you can buy a relatively expensive house with a small down payment (as little as 5%), and borrow the rest, to be paid back over time. And you get to live in the house in the meantime.

b. Our tax system rewards home buyers. Remember that all of the interest you pay on your home mortgage is tax deductible, which can lower the effective borrowing cost to the 6% range. And other incentives when you sell allow you to postpone or avoid taxes due on profits. None of these benefits applies to renters. Which brings us to financing.

c. Interest rates are attractive right now. Now is an excellent time to lock in a long term loan at a low fixed interest rate. You will have the assurance of knowing that the payments will never increase if rates go up, and you can also refinance the loan if rates should get much lower (don't hold your breath).