Some people are saying the air is starting to come out of the housing bubble, but record sales suggest that homes have a long way to go before the bubble pops in mid-air. Either way, you should be ready with your homebuying or homeselling strategy.

You may be aware that mortgage rates have increased by more than one-quarter percentage point in the past month. To give homebuyers an idea of what impact such an increase might have, let's assume that an average 30-year fixed mortgage rate a month ago was 5.8 percent. That would mean that the monthly payment on a loan of $165,000 was $968. A quarter-point increase means that the same loan would have a payment of $997, nearly $30 more. The difference would amount to more than $10,000 over the full term of the loan.

Most economists don't believe that rising mortgage interest rates will hurt housing sales until monthly mortgages are higher by $100 or so, but with the recent rise in oil prices, that Ben Franklin might be going to fill up the family car instead. Fuel prices are expected to raise costs all around, increasing the threat of inflation.

Meanwhile, earnings aren't keeping up with inflation. The average hourly wage is up 41 cents an hour, or 2.6 percent over the last 12 months, but consumer prices in that time have risen 3.6 percent, and housing increases are still in the double digits. Economists predict that core consumer prices could jump 1.5 percent, a 32-year high and the second biggest increase ever.

But there's some good news.

The double whammy of Hurricanes Katrina and Rita didn't wipe out as many jobs as forecast. While there was a net decline of about 150,000 jobs in September, there was a silver lining. Gains were reported in construction and oil and gas, among other sectors. Plus, the nation has responded with open-armed generosity, offering food, shelter and jobs to evacuees everywhere. Thousands of evacuees have already begun to settle in Texas and surrounding states, or return to the Gulf area to temporary housing.

Despite reports that Americans aren't saving as much as they should and are taking too many borrowing risks, they seem to be taking better care of their credit scores. According to TransUnion, one of the three credit reporting bureaus, median consumer credit scores are at 682 -- six points higher than two years ago. This is the most substantial increase since mid-2000.

While many thought investors would start to move some of their real estate gains back into the stock market, so far that's failed to happen. Stocks have not only stagnated, but have experienced some of the largest losses recently since 9/11. Inflation fears have taken hold and that means that consumers will be a lot more careful where they put their money. Typically, income-challenged buyers pressure prices downward.

That means that while food and gas may cost more, other products and services may keep the clearance tags handy.

So what can homebuyers and home sellers take away from the mixed data? Realty Times believes consumers take a wait-and-see attitude in turbulent times. We believe that certain markets will moderate, as homebuyers look for prices to drop. But single-digit price increases, considered modest by recent gains, will continue and will start to look very attractive compared to other investments which may be losing ground.

Our advice is -- don't wait too long. Use the lull in activity to position yourself to advantage.

If you see the property you want come on the market, don't hesitate. Interest rates are still historically low and you can take advantage of rising inventories to negotiate the terms you want. While prices might drop further, don't be dismayed. That could be a temporary correction that can reverse itself yet again. If you are buying in a location that has reached highs recently, it's a good bet that the highs will come back, and maybe sooner than you think.

You don't want to jump into the market when everyone else decides to -- or you could find yourself in the multiple-offer, high-bid situations of last year all over again. If you buy during the lull, you'll have months or years of enjoyment in your home before it's time to turn it in for a profit.

We always recommend that sellers keep their homes in premium condition. No matter what the economy, there's never a time when buyers don't want the best they can possibly afford. High energy bills might take a bite out of large homes for a while, so if you have a smaller home to sell, you might find the market's suddenly more attractive for it.

More important than size is how a home functions. Today's consumers prefer open, sunny floor plans, but you should also make sure your home is energy-efficient. Plug those air leaks and buy new energy-saving appliances so you can show your buyers heating and cooling bills they'll appreciate.

Published: October 17, 2005

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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.