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."
Real Estate is Local
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.
Generous FHA Rules
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.
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.
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.