What if you could find gas for 1971 prices or could buy your groceries at that price?  Would you buy a car at 1971 prices?  Well there is something that is at 1971 levels and that is mortgage rates!  Recently 30 year mortgage rates dropped to 4.17%!!!! 

While I know that there are buyers waiting to see if housing prices go down, it is important to realize that the bottom line is money in your pocket.  As a general rule $1000 in price equates to about $10 in monthly payments - so if you are waiting for a price drop of $5000 you are really talking about $50.  HOWEVER if you lock into a low interest rate, that also means less money you have to pay over the life of the loan resulting in potentially larger savings than a price drop.

An example is a $200,000 mortgage at
1990's rates 7.75% would be $1432.82
2009 rate of 5.5% would be $1135.58
Current rate of 4.17% would be $974.54
That's a savings of $161.04 a month just since last year!  And the reason you're not buying a home now is why?

http://www.chron.com/disp/story.mpl/business/realestate/7290693.html