Is Now the Best Time to Buy a Home?

Federal Reserve Chairman Ben Bernanke acknowledged yesterday that, while the economy is improving, the housing market still has a way to go. However, there are some factors in play that suggest now might be the right time to buy a home.

On "The Early Show," CBS News Business and Economics Correspondent Rebecca Jarvis said people who have been waiting to buy need to know that the era of rock-bottom mortgage rates is over.

She said, "Rates are going higher from here."

Jarvis cited the Mortgage Bankers Association, saying, "The average 30-year fixed-rate mortgage is at about 5.3 percent. That's already up half a percent from last year. And with the economy on the road to improvement, the Obama administration doing less that keep mortgage rates lower, we'll see them go higher from here.

"Early Show" co-anchor Maggie Rodriguez pointed out potential buyers be aware that if mortgage rates go up even slightly, that could make a big difference as far as payments.

Jarvis added, "A very small difference in a mortgage rate makes a big difference in your monthly payment. So take a $300,000 mortgage, what you're looking at in a five percent interest payment is $1,600 a month. Bump that up one percent to six percent mortgage, you're looking at a payment of $1,800 a month. And over a year, we're talking about more than $2,000."

As for the Home Buyer Tax Credit, the April 30 deadline is now closing in quickly.

Jarvis explained, "You have to close out your paperwork by April 30, to get $8,000 if it you're a new buyer, $6,500 if you're a second-time or third-time buyer. And you have to close on the purchase by June 30."

She continued, "While mortgage rates are almost certainly going higher, home prices can still come down. Even though we're seeing signs of stabilization in the overall market, it's important to really know the market you're looking to buy in. Before you make an offer, be certain that it's the right house at the right price in the right location for you. And know that you're planning to live in it for at least five years."