If you listen to Wall Street, the majority of the economists are calling for higher inflation. Higher inflation usually equals higher mortgage rates. We just had a client lock into a thirty year mortgage at 4 3/4%. The purchase price was $560,000. The loan amount with 20% down is $448,000. If mortgage rates jump back to where they were in October of last year (6 3/4), the monthly mortgage payment would increase $570.

Another way to look at it is from a buying power standpoint. Lower mortgage rates afforded this buyer a more expensive home. If rates jump back to 6 3/4%, the same buyer with 20% down payment would only be looking at a purchase price of $450,000.

Every buyer is looking at "price" in this market. Not the cost of money. Real estate prices in some areas of the city have stabilized and even increased in the last three months. If you think prices are going to come down 20%, don't hold your breath. The cost of money just gave you a 20% discount on the market.

There are great properties out there at great prices. Be smart! Buy NOW!