While the number of foreclosures doesn't appear to be leveling out anytime soon and home values continue to decrease, it may not be a bad time to buy - for some people at least. Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, according to the Mortgage Bankers Association's National Delinquency Survey published last week. Those figures surpassed the previous high of 0.83 percent over the last three months in 2007.                                                                                                                              

The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35 percent - or 2.87 million loans - compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are past due by 30 or more days. The seasonally adjusted total delinquency rate is the highest recorded in the MBA survey since 1979. The association's survey covers just over 45 million home loans.

With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up," Jay Brinkmann, the MBA's vice president of research and economics, told The Associated Press.

California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures. Home values in these states have been hit hardest due to the overstock of new homes and the increasing foreclosure rates. The weak demand, compounded by too much supply, only prolongs the housing problem in these areas.

Is it time to buy?
A recent Associated Press-AOL Money & Finance Poll found that nearly three in 10 people say they are worried that their home's value will decline over the next two years. Sixty percent said they definitely won't buy a home in the next two years. That's up from 53 percent from two years ago, according to the poll.

The sagging housing market has created a double-edged sword for home owners. While prices have dropped to as low as 20 percent in some markets, making it extremely affordable to buy your next home, some owners are concerned about being able to sell their current property. No one wants to get stuck with a double mortgage. For this reason, this subgroup of buyers appears to be waiting for the market to turn around and property values to slowly creep back up before they toss their hat into the buying ring.

But for the class of buyers that have been renting for years and saving up for their first home, the fruit couldn't be riper for the picking. For years, rapidly rising prices kept many first-time home buyers out of the housing market. But now, as home values continue sliding and interest rates hover at relatively low levels, it may be time to start looking for that first home. That doesn't mean everyone should abandon the renting ship for home ownership. On the other hand, if you have a secure job, can afford a higher down payment (than what was required a few years ago) and can meet a lender's much-stricter income and credit requirements, then you're a shoo-in.

Don't make the mistakes of those before you. The good-old-days of "go big or go home," are all but gone. You want to be financially realistic when deciding whether you should spring for your first home. Remember: You're investing in a place to live, not speculating in the stock market or even putting money into a savings account. So keep it simple. Buy smarter. Buy cheaper.

How do you get started? Homescape's Home Buying Guide will point you in the right direction.

Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.