Is this the time to buy?
It very well could be if you have a strong belief that you will keep your job or business.
In addition to incredible bargains and the usual tax breaks, until july 09, you can get up to $7,500 tax CREDIT (not deduction). That means that if you owe $7,500 in taxes you pay nothing in federal tax. This applies to any home, new, used, etc. but only if you haven't owned a home for a few years and will make the new home your primary residence.
Fixed mortgage rates are likely to drop below 5% for a 30-year and you have the deal of a lifetime!