Will 2012 be the Year of the House?

Housing, the epicenter of the financial crisis, could finally bottom this year. I know you may have heard that hope/prediction before, but 2012 may just be the Year of the House. That doesn't mean we'll soon return to the bubble years of 2000-2006, when house prices doubled and house-flipping became the national pastime. It does mean that both housing starts and sales could increase from the rock-bottom, terrible levels that we have seen over the past two years.

There were some glimmers of hope last year: Layoffs stopped in construction for the first time since 2006, and apartment sales and construction helped the sector look a tiny bit healthier. That said, any increases will be small, and prices may drop a touch before leveling out later in the year. The culprit remains the foreclosure pipeline, which remains bloated.

Many experts say that because the housing bubble was so dramatic, we might not see a "normal" market until 2013 or 2014. But like any asset, you shouldn't try to time the rock-bottom price or rate. Here are three things you need if you are considering a home purchase:

1) A 20 percent down payment: There's probably a lender that will do less, but the traditional "20-down" could save your bacon if house prices continue to decline

2) Good credit: Check your credit before starting the mortgage process -- you can get reports from all three agencies free of charge at annualcreditreport.com. If there are any problems, you can correct them before the loan process begins.

3) The financial rationale to buy: If you are currently paying really cheap rent, buying may not make a lot of sense. Check out this great New York Times rent vs. buy calculator.