The caster needs to be 5th level to take the feat, but the wand he creates can have any caster level he chooses as long as it is not higher than his actual caster level. The wand's caster level must be at least as high as needed to cast the spell in the first place.
For example, a wizard with the feat could create a wand of magic missile (1st-level spell). He can set the caster level at 1. This would create a wand with a base price of 750 gp (Spell Level x Caster Level x 750). Each charge from the wand would create one missle. Alternatively, the wizard could choose to make it a wand of magic missile at 3rd caster level. Such a wand would have a base price of 2250 gp and create two missile per charge, since a 3rd-level caster creates two magaic missile per casting (as described in the spell description). He could also make a 5th-level wand of magic missile that shoots three missile per charge and has a base price of 3750 gp. He could NOT make a 7th-level, four-missile-per-charge wand since he is only 5th level.
A 5th-level wizard could also create wand of searing ray (2nd-level spell). It would have to be a wand with a minimum caster level of 3rd since that is the lowest level at which the wizard can cast a 2nd-level spell. Such a wand would have a base price of 4500 gp.
Thanks,
Atavar