Home prices continue to fall in the U.S. market and that is a good thing for those looking for homes. Here are five things that you should know when buying a house in today’s economy:

1. Mortgage rates are low - In case you haven’t been paying attention, mortgage rates are still very low which makes your payments low. In a survey on August 19, 2009 completed by the Mortgage Bankers Association, today’s mortgage rates are averaging just 5.67%. Use this to your advantage along with a strategy of taking out a 15-year mortgage so that you build up equity sooner in your new house. This will help even if you do not plan to keep the house for 15 years because you will have paid down more of the principle which makes selling easier (gives you more room to negotiate on price).

2. Avoid buying more than you can afford - People who are looking for houses to buy right now are looking for bargains. That is not a bad thing, but it can cause you to over-stretch and buy more than you can afford. Instead, make a wise choice of purchasing a house that offers you more at the price you can afford.

3. Mortgaging more than 80% - One of the reasons that too many people got in over their heads on their mortgages was because of the ability to finance 100% of the cost of the house. Going into the mortgage, they had no equity and no room to breathe should something happen (like a lost job). Make it a part of your strategy to make a down payment of 20%. If this is not possible, at least put down 10% and then take out a 15-year mortgage.

4. Look everywhere for good buys - There are great prices on good homes almost everywhere you look. Avoid jumping on the first house that comes along. Play the field and see what better deals are out there than the previous one that you have found. Purchasing a home is largely an emotional decision and keeping this in mind can help you fight your urge to buy something now and miss a better house later on.

5. Think long term, not short - Buy your next house and plan on staying a long time. This will help you decide which houses will fit your needs. With economic conditions as they are, a ten-year plan to stay is smart. And even better, staying 15 years on a 15-year mortgage will have you in a pretty position when it comes time to sell.

Since the inventory of homes on the market varies by location, patience is needed to help you find the best deal for you and your family, but if you take your time, you will be amazed at the results.