I actually had this answered the other day in an article which I'll try to find before I complete this and send it. Basically, it's a pretty good bet that the rates are about as low as they're going to get. The Fed is already hosing us with inflation by having the rate where it is, and I don't think they're going to drop a whole lot more, if any. And remember, the rates are actually tied to futures. This is why the rate actually went up the time the Fed dropped the rate time before last, and I think futures will drop if the rate drops any more, as well. I know this paragraph is confusing, but it's the best way I have to explain this part of it.
The other side is pricing. Many experts believe we're pretty much at the bottom. There are a few doomday prophets that are foreseeing much worse, but I think they're just trying to stay in the limelight as long as possible. So even though prices may still drop a bit, they're not going to drop a whole lot more. At least in most markets.
Point is, let's say you are looking at a home that used to be $260,000, that you can buy now for $200,000. At 5.5% interest rate. That's $1135 / month with nothing down. Now, let's say the price drops to $190,000 in the next year, but rates are up to 6%. Easy enough for it to do, or even higher. Now you're new mortgage costs you $1139 / month.
Basically, find a home, lock in, and buy a home now. Or look back and be depressed.
Just my 2 cents worth....
BTW - couldn't find the article, I'll post it when I do.