I thank you all for sound advice. I doubt Manhattans prices will decline if a venture capitalists are willing to put up a 40 story condo/rental and opening it 3 years after the WTC, NYC finacial hardship, stock market decline, employment on the rise, ect. I believe these men are betting for money to be sitting somewhere out there waiting to be spent. I'm sure there are others in their 40s like me, who feel caught (want to get their foot in the door of their communities). Its so sad for us middle income earners--we save for retirement (because who knows about SS with the economy),we save for education (or pay off educational loans) yadda, yadda, yadda, and don't have much for decent downpayment. I'm going to keep putting away my pennies and see what's what with mortgage interest. Worse comes to worse, I'll look for retirement home (vacation home) in the lesser built up areas along the Eastern Shore. There are some pockets along ES where you can buy a decent but small 3 bedroom home for less than $80,000.