You may be still reeling from the housing crash, or recovering from unemployment.
But if you can afford to pull together a down payment on a home, consider making that investment now, experts say. Cheap prices, low interest rates and favorable lending terms make this one of the best buyer markets ever, and many buyers seem to be recognizing that: The government reported today that sales of newly built homes in March saw the single biggest monthly increase -- nearly 27 percent -- in 47 years.
"It's a phenomenal time for a renter to become a homeowner," says John Burns, CEO of John Burns Real Estate Consulting. "If you're waiting to catch prices a little cheaper you may be making a big mistake."
One word of caution: nationwide trends don't apply to the same degree in every neighborhood.
Experts suggest keeping an eye on a variety of local statistics to help gauge the market outlook.
William Wheaton, professor of economics and urban studies at Massachusetts Institute of Technology, says one question shoppers should keep in mind before signing a check is whether their community is growing and how much they're paying compared to the cost of building from scratch.
"Sooner or later prices come back to development costs," he says. These costs -- which summarize how much it costs to build a square foot of new property -- can be obtained from local zoning boards and builders. "If you're in a growing market and your costs are below the cost of development, it's a guaranteed investment."
In addition, Celia Chen, a senior director and housing specialist at Moody's Economy.com, says inventory data sheds a light on the balance between supply and demand in your neighborhood. The data typically measures how long it would take to sell existing listings at the market's current pace. The national average is now around 8 months, whereas the healthier historical average lies around 5-6 months. Chen says local inventory data is available from local realtor associations.
Here are four forces which experts say will likely propel the housing market higher in the coming years.
Homebuyer Tax Credit
Most perishable is the home buyer tax credit , which expires on April 30. It offers first-time buyers a bonus worth 10 percent of the purchase price, up to a maximum of $8,000, and offers repeat home buyers a bonus worth up to $6,500. Anyone who hasn't owned a home in three years is considered a first-time buyer.
While $8,000 isn't a huge amount of money compared to most purchase prices, it helps defray some of the costs associated with buying a home, says Nichole Thompson-Adams, a realtor with the Corcoran Group in New York.
Real estate agents say they have seen a flurry of buyers rush into the market in recent months to take advantage of the credit before it expires.
Another reason buyers can do well right now is because the Federal Housing Authority still has fairly generous rules that make it easier for low and moderate-income buyers to qualify for mortgages.
Currently, buyers who can secure FHA guarantees can buy a home with a 3.5 percent down payment, which is lower than most lenders require for non-FHA mortgages. The agency also allows borrowers to carry more debt than private mortgage insurers, and has more flexible standards for borrowers' credit ratings.