Many potential home buyers are wondering whether or not this is the right time to step back into the housing market. Experts seem to be quite divided on this topic, as the real estate market has been one of the hardest hit sectors of the economy.

It could possibly be years before the economy and the housing market can make a full recovery. Nobody can call the housing bottom until values have stabilized and are increasing across the nation. Amidst all of this uncertainty, could now be the right time to invest in a home?

A brief Internet search will show many different opinions on whether to buy now or wait. Even so, it may be the right time for YOU to buy, based on lower property pricing and historically low mortgage rates. Before you decide to invest in a home, it is vital that you educate yourself about the current market situation and determine your needs and time frame.

Many people seem to think that because property values have fallen so low, homes are now undervalued. While there are certainly some homes on the market now that ARE undervalued; priced lower than what the market can bear, not all homes are underpriced. REO homes (those that are now owned by the bank due to foreclosure or deeds in lieu of foreclosure) are not necessarily priced below fair market value.

Yet despite all the ambiguity about when the housing market will fully recover, and whether or not housing values and prices will fall further, there are still facts that are in support of buying a home now. Mortgage rates are at nearly historic low levels, and house prices are back at values not seen since 2003. This could be a good time to buy if you believe you will keep the property for several years. This will allow time for the market to stabilize.

According to most experts, low mortgage rates are not likely to last beyond the first quarter of 2010. The Feds have been buying mortgage backed securities to subsidize the current mortgage rates, but that subsidy will end March 31, 2010. At that point, most analysts believe rates will rise.

Low mortgage rates allow a potential home buyer to qualify for more home at the same monthly payment. There is no way to know now how high or how quickly mortgage rates might rise, but rates are currently about 1% – 1.5% below where they were just a year ago, so that can create a substantial opportunity for a home buyer.

In addition to the low prices and low mortgage rates, the government is encouraging home purchases with a tax credit of up to $8,000 for first time home buyers. Existing home owners can get a tax credit of up to $6,500 for buying a home. Buyers must accept purchase offers no later than April 30, 2010, and must close on that purchase by June 30, 2010, in order to qualify for these tax credits. Some states are offering even more cash incentives.

Historically, the United States has experienced many recessions. In fact, boom and bust cycles are an economic norm. While this recession has been the most severe since the Great Depression, no one doubts that it will end and housing values will rise again. Historically, property has been a great investment. It is very likely that those who purchase now will reap the financial benefits in a few years.

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