I had the pleasure of saving for a house a couple of years ago, right at the beginning of teh big real estate run-up here in the Metro-NYC area. My best advice to you is to put your savings into a high-yield money market account where you do not have easy access to such as a ATM or debit card. I would recommend opening up a money market account with INGDirect.com . The yield is very high and their website gives you the ability to transfer in cash from another account seamlessly, making it easier to add to your savings. With the stock market so volitile now, it is best not to invest your home savings into a mutual fund right now. I have a bunch of friends who did that in 2000 and are still renting 5 years later.
