Moreover, Trulia found that nearly two-thirds of young people — 65 percent of those aged 18 to 34 — also consider home ownership to be part of the American Dream, even though ownership figures within that group have slumped since 1980.

Overall, the top three things that buyers want are a great room instead of a formal living room, a walk-in closet in the master bedroom, and a laundry room.  First-time buyers also want the same thing, but they are more likely to be satisfied with a small laundry room without an attached mudroom and a smaller master bedroom and smaller walk-in closet.  First-time home buyers tend to rate energy efficiency high on their wish list.

One thing that first-time buyers are not willing to compromise on is buying a home that is in need of repairs.

In August, the Fed had made a rare move to say it would keep rates near zero until at least mid-2013. The Fed said Wednesday that the economy still needs more help and it will now extend that period to 2014.

Rather than an across the board 3 percent ceiling on all FHA mortgages, the policy would permit higher seller contributions, probably between 4 and 5 percent, on smaller loan balances.  Meanwhile, the 3 percent cap would be mandatory on all loan amounts above some yet to be determined limit.

It is expected that FHA will announce the changes to its policy in April, 2012.

December existing-home sales rose 5.0 percent.  For all of 2011, existing-home sales rose 1.7 percent to 4.26 million from 4.19 million in 2010.  Existing-home sales are based on transactions from multiple listing services that include sing-family homes, townhouses, condominiums and coops.

Record low mortgage interest rates, job growth and affordable home prices are bringing more consumers into the market.

For the fourth consecutive month, builder sentiment for newly built, single family homes was on the rise, according to the National Association of Home Builders and Wells Fargo Housing Market Index.

More encouraging is that the latest increase in January is “universally represented across every index component and region” said Bob Nielsen, NAHB chairman.

There have now been several months of gains in single family housing starts and sales indicating a gradual but steady improvement for the housing markets nationwide.

From their peak in 2006, prices have fallen 35 percent.  Half of closed home sales in 2011 were either foreclosures or short sales.  By comparison, in 2004 and 2005 as the housing market was booming, 3 to 4 percent of all sales were from foreclosures or short sales.

The U.S. Department of Housing and Urban Development encourages potential homebuyers to obtain an independent home inspection.  Home Inspectors focus especially on the structure, construction and mechanical systems of the house and will make you aware of any repairs that are needed.  It is advisable to find an inspector independently of those involved in the purchase transaction, including your buyer’s agent.   Be sure to hire a home inspector that is qualified and experienced.  Generally, and inspector checks the electrical system, plumbing and waste disposal, the water heater, insulation and ventilatiuon, heating and air conditioning system, foundation, roof, doors, windows, ceilings, walls, floors and water source.  For more information on home inspections, read HUD’s For Your Protection: Get a Home Inspection booklet, which can be found at www.hud.gov.

The Federal Reserve has vowed to keep rates low through 2013 so these rates will likely be around for a few more months at least, however many experts say it is unlikely mortgage rates will stay at the current record lows.

According to Freddie Mac economists’ forecast, the 30-year fixed rate mortgage is expected to increase to an average of 4.50 percent  in 2012 and up to 5.40 percent in 2013.

For comparison, the 30-year fixed rates averaged more than 16 percent in 1981 and 1982.