Mortgage Trends » Is now the right time to buy a house?

Low mortgage rates and declining home values make homeownership extremely affordable these days. But does that mean now is the right time to buy a home? Should you wait?

It depends on whom you ask, where you live and most importantly, on your own situation.

Unfortunately, "nobody hits the gong when the market hits bottom," says Jed Smith, managing director of quantitative research for the National Association of Realtors. But in many markets, it appears that home prices are close to bottoming out, he says.

"In terms of affordability, now is definitely a good time," he says. "Prices are fairly low and interest rates are hovering at historic lows ... but real estate is very local. It's not just a question of state or city, but ZIP code."

Home prices declining in most markets, but not all

The median price of homes sold nationwide in the first three months of the year declined 4.6 percent compared to the same period last year, according to the National Association of Realtors. Some parts of the country are experiencing much greater depreciation in home values. One example is the Miami-Fort Lauderdale area in Florida, where the median price of homes sold in the first quarter of the year declined about 20 percent. But not all markets are hurting. One of several markets that saw a jump in prices was the Buffalo-Niagara Falls area in New York, where the median price of homes sold in the first quarter increased 10.8 percent.

"Every market is different and every situation is unique," says Scott Caballero, area manager for PenFed Realty in San Antonio. "That's why it's good to speak to a professional who knows and understands your market."

While national statistics don't paint the whole picture, generally, they can help you understand where the market might be headed. Fannie Mae recently projected that home prices will continue to fall during the next three months and begin stabilizing toward the end of the year. Some economists are not as optimistic and don't expect the housing market to recover until 2014.

Does that mean you should wait until 2012 or 2014 to start looking for a home? Not really -- unless you have personal reasons to wait, says Ed Conarchy, a mortgage planner and investment adviser in Vernon Hills, Ill.

Mortgage rates not expected to stay low

While most real estate experts don't expect home prices to spike in the next couple of years, it is unlikely that mortgage rates will remain low for long.

"The chances (mortgage rates) could go up a lot is much greater than the chances of them going down a little bit," Conarchy says.

The rate on 30-year fixed mortgages reached a record low of 4.42 percent in November 2010, according to Bankrate's weekly mortgage rate survey. The record high was about 18 percent in 1981. (Bankrate began conducting weekly rate surveys in 1985.)