Hi Polly- Everything is very localized- down to the town/ city and sometimes even to the neighborhood within a town- as far as pricing trends, etc.
For greater Boston area, I think you are looking at next Spring (2010) before prices stabilize- meaning they stop declining. After that, the price increases will be very slow. That is what most experts believe.
For interest rates, I'm in the biz and we had 3-4 months of very low rates- 4.875%, etc- that are gone now. Who knows if they will be back. I tend to doubt it. Average mortgage rates over the past 15-17 years is over 7.25%. That's the average. Many months were higher than that.
So, based on history, I would assume rates will trend higher as we proceed. By the time home prices stabilize, rates will probably be higher than today. Maybe by quite a bit. All that said, might be worth buying a place sooner than later.
If I can be of any help, please let me know. Thanks, and good luck,