Additionally, "higher mortgage rates would also reduce refinancing activity. Some have speculated that this could encourage banks to make more credit available to borrowers, " Kolko told TheStreet.

So there is hope for first-time homebuyers.

But the bottom-line is this: If you are a first-time homebuyer, it is not your turn yet. You might have to wait for the right conditions to set in before entering the market, even if it means you miss out on the easy returns from the housing rebound.

-- Written by Shanthi Bharatwaj in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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