Advice on saving up for a house

[BrianWeatherdonCFP]

You can certainly save to buy a house before facing the question of where you'll be, or what kind of home, or whether it will be economically better at that point to buy or rent. You have a goal, a vision, a purpose; don't be swayed from that. Meanwhile you'll manage spending and increase your savings in order to create the opportunity to buy a home when you are ready. And you'll look back at these steps now and be grateful for what you've achieved. <> Congratulations in advance, you're on a good path.
BW

[keviny182]

My advice? Different.

Save it in a tax-deferred retirement account. Invest it aggressively. Then, take advantage of the IRS rule that says you can liquidate certain types of funds penalty-free for the purchase of your first home.

Some of my funds in my IRA have returned better than 24% in the last year. Will it continue? Probably not, but a more sustainable 5-7% is better than 0.5% in a savings account, or 3% in a CD. If plans change, you have a heavily bolstered retirement account that, if you can refrain from touching it, will be graced by the power of compounding interest.

This definitely caught my attention. I've known about the penalty-free rule but never considered it as vehicle to save for a house. Thank you for this insight; I will consider it.

Thank you to everyone else that have responded and given their knowledge.

[keviny182]

First off, there are savings priorities:
1) Are you saving for retirement? At least save enough in your company's 401k (or equivalent) to earn the full match.
2) Do you have a 6-month emergency fund in savings?
3) Back to retirement--If possible, max out a Roth IRA.
3) Okay, NOW you can save for a house. You want to save up a 20% downpayment, plus expect you will need at least another 5% to cover fees & closing costs, furnishing costs (appliances & furniture), and other initial "startup" expenses for owning your home (lawn care stuff, general maintenance tools & supplies, etc.). But please--don't buy until you REALLY CAN afford it. Buy too early, and it can be easy to get yourself into financial trouble.

I am saving for retirement. I'm saving 8% each paycheck into a simple IRA, with a 3% company match. I do quite have a 6 month emergency fund; it's currently looking more like 4 months.

I'm not trying to rush into purchasing a house. I just wanted to know that I have the ability to if I choose to do so.

Thanks!