Near record low interest rates are making homes much more affordable.

According to the Mortgage Bankers Association, interest rates fell last week which boosted mortgage applications to a seasonally-adjusted 32.2 percent. In real terms, total mortgage applications shot up an astounding 8.7 percent compared to the same week a year ago.

Rates on 30-year fixed mortgages averaged 5.73 percent, down from 6.05% only the week before.

For every 1/8th point on a conforming loan, you pay about $25 per month in interest. If you refinanced, you improved your position by $50 a month just for refinancing last week instead of the week before.

That could explain why financings were 57.7 percent of mortgage applications last week up from 50.9 percent the week before.

The typical homeowner plans to stay in their home about 10 years. That could explain why more people were interested in refinancing their mortgages last week than putting their houses on the market.

Housing prices are flat and predicted to remain so, so homeowners can afford to sit tight.

Now some market timers might think they should wait for lower rates to accompany lower housing prices, but they risk missing out on the choicest properties.

They want low rates, low housing prices, and the right home to wait. What are the odds all three will be there? Right now, the greatest risk is that the home the buyer wants will be snapped up by someone else who's not willing to play chicken with $25 to $50 a month. And that's when housing markets trend upward.

The mortgage bond market anticipates the news, like employment data. Unemployment was 4.5 percent in November. Today it's 5 percent. Inflation data and other economic data has already been calculated to assess long-term lending risks.

Mortgage rates might improve a fraction or two, but it's far more likely they'll go up, based on the latest inflation data.

That's not a bet smart homebuyers should be willing to take.

Published: January 10, 2008

Use of this article without permission is a violation of federal copyright laws.

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. For more articles by Blanche, click here.