Time to Buy a Home? Yes, But Keep an Eye on Local Data

Burns says it's not clear how long the FHA will be able to offer those terms, considering its recent financial troubles. The FHA has been tightening its standards recently after its reserve fund last year fell to its lowest level in history. The agency has cut the contribution that sellers can make toward closing costs and increased fees charged to borrowers whose loans its guarantees.

Low Interest Rates

One of the biggest advantages of buying a home now, of course, is low interest rates. An average 30-year mortgage currently costs borrowers 5.04 percent, according to the Mortgage Bankers Association. The average rate since 1971, by comparison, stands at a whopping 9 percent.

Interest rate will likely face upward pressure from a variety of sources.

At the end of March, the government ended its program of buying up mortgage-backed securities in order to push down interest rates and help the housing market recover.

"Mortgage interest rates will rise this year now that the Federal Reserve has ended its program," says Celia Chen, senior director and housing specialist at Moody's Economy.com.

In addition, the Federal Reserve is likely to start raising its benchmark federal funds rate, currently around zero, once the economy begins recovering more strongly.

"A downside risk for the housing market is that the mortgage rate will rise more quickly than expected," says Chen.

Cheap Prices

The final and most important factor that experts cite requires little explanation: low prices.

The median price of a single family home has dropped 25 percent since the market peak in 2006, according to the National Association of Realtors. In some cities, particularly hard hit by the crash, such as Las Vegas and Miami, prices have dropped more than 50 percent.

That's not to say that the slide is over. Celia Chen, of Moody's.com, says the market won't bottom out until the middle of 2011. Cities such as Miami, burdened by heavy foreclosures and oversupply, could fall another 30 percent before stabilizing.

But overall, economists believe the housing market is near its bottom. Burns, the consultant, for example, predicts that home prices around the country will begin to rise again this year and gain 12 percent by 2013.

The advantages described above – such as low interest rates and the homebuyer tax credit – make housing prices particularly affordable for buyers expecting to stay in their homes for the long haul.

"The housing correction is almost over," says Chen. "Now is a pretty good time to buy."

ABC News' Daniel Arnall contributed to this report.

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