If you are trying to buy a home, you are probably kicking yourself for not locking in an interest rate before the Federal Reserve Bank hiked short term interest rates by 50 basis points last month, but that's okay - you still have a chance to get a good loan at a reasonable rate.

When you fail to get in on a good deal, it's easy to grumble. Borrowers are saying, "Ouch," and the housing market is slowing slightly as a result. But you know what? The economy is merely balancing back toward more normal levels. It's hard to appreciate good news when it hits you in the pocketbook, but there are reasons why higher interest rates are a good thing for you as a buyer.

Due to the kill-joy tone of the FED chairman Allan Greenspan, economic pundits predict that interest rates will keep rising. The Labor Department's low jobless rate data didn't help home buyers either. A tight labor market could signal rising inflation and the FED is watching that inflation doesn't get a toehold. So, the pundits say, look for an another rate hike in June when the FED meets again.

While it's great that most people have a job across the country, you can still hear the buyers groan. Interest rates are at their highest levels since 1991, another rate hike would be disastrous for the housing market - or would it?

For the last couple of years, buyers in hot seller's markets have been at an extreme disadvantage. Home prices have shot up. Buyers represented by the best of Realtors found that if they didn't offer over market value and make a number of other concessions, that their offers were rejected. Many didn't even get to bargaining table at all - the homes sold before the Realtors even knew they were available.

Every time the interest rates go up, a tier of buyers has to climb down a rung. With fewer buyers able to afford homes in their target price range, an interesting adjustment takes place. Sellers quickly become more reasonable about their pricing. More homes become available for sale on the open market. That means that the buyer has more choice and can make offers at a less frenzied pace. In other words, the buyer has more power in the transaction.

So, you really didn't miss out on a bargain after all. It may seem that you are able to buy less home for the same amount of money as you were able to a few weeks ago, but you'll find that the market quickly adjusts as homes sit unsold. Less attractive homes will plummet in asking price. Middle price homes will be marketed with more features to attract more buyers. High-priced homes will stay on the market longer until they find the right buyer.

So quit groaning, get your loan locked in and get your REALTOR® to show you some homes. You're behind the controls now!

Published: May 25, 2000

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.