It's been up and down for mortgage interest rates lately, but homebuyers have found interest rates even lower than they expected for this time of year, 5.53 percent for 30-year fixed-rate loans.

Both Freddie Mac and the National Association of Realtors are predicting that the second half of 2005 will see only a slight rise in 30-year fixed rates. They are likely to average only 5.9 percent. That is at least a percentage point less than previously predicted by housing economists.

The fluctuation in interest rates had a galvanizing effect on homebuyers. According to the Mortgage Bankers Association, applications for home purchase loans were the highest ever recorded. As the economy improves and inflation remains closely watched by the Federal Reserve, more experts believe that the low mortgage interest rates of today will not last forever but the housing boom will last as long as interest rates remain low.

Meanwhile, home prices continue to rise. David Lereah, chief economist for the National Association of Realtors, says the trade organization now expects sales records in both existing and new home sales in 2005. This will be the 5th consecutive annual record, says the NAR.

Already, the current 13-year housing boom is the longest on record, followed only by the 1970 housing boom which lasted only five years, says the Harvard Center for Joint Housing.

What does this mean to homebuyers? One of the reasons the boom has sustained itself for so long, says the Center, is that housing starts have been and are in line with demand if not a little behind. New homes are at their lowest level of availability ever. For this reason, the Center predicts that the boom may continue a while longer because markets have room for resiliency.

That's what's happening on the national level, but what about local news?

Realty Times has thousands of agents reporting market conditions in over 7,000 locations. This week, the majority of our Market Conditions reporters are saying that their area is in a seller's market. A seller's market occurs when there are more buyers wanting to buy properties than there are properties for sale. It's no wonder that these agents are also reporting that prices are rising in their areas.

For sellers, it's a great time to sell your home and purchase a home that may better suit a changing lifestyle. Perhaps you've added more family members and need more space, or you want to downsize to a townhome or condo and travel the world without maintenance worries. Today's low interest rates can make your dream happen.

Advises Jody Lane, president of Realty Times, "It is very rare that this type of environment exists in which a market is favorable to both the buyer and seller. Act now and call your local Realtor."

To find out what market conditions are like in your area, or to find a Realtor, please go to RealtyTimes.com for your daily local market conditions report.

Realty Times' Market Conditions Reports

The Isle of Palms, South Carolina has both condos and single-family homes either on the beach or within a few minutes walk. Prices continue to increase as more and more people justify the price of their second home as the "place they will retire someday." In the last 30 days, there were 21 sales on the Isle of Palms with an average sale price of over $1,500,000. And prices continue to rise as more buyers are chasing fewer homes, resulting in sellers often having multiple offers. Our experts say, "Often the accepted offer is greater than the list price."

Minnetonka, Minnesota homebuyer and seller activity for the week continues at a record setting pace as the residential real estate market bounced back from a temporary holiday stall. The growth in active listings continues to outpace pending sales, which should result in home prices stabilizing over the next six weeks.

The gradual increase in demand for city living is having an impact on home prices. Benefiting the most from property price appreciation over the past five years are the core cities of Minneapolis and St. Paul . Next in line are some of the developing ex-urban areas and most of the first ring suburban communities.

In Surprise, Arizona , the market is still hot. Properties continue to move fast with the best buys in real estate selling within the first few days of being on the market, many with multiple offers. It's also not unusual to see homes selling for more than the asking price, due to bidding wars. Now is the perfect time to buy and sell, as the price of housing continues to rise, creating a hot market for appreciation. New homes can't be built fast enough to meet the soaring demand.

Continuing with this trend, the medium sales price for a residential home in Maui, Hawaii hit $780,000 in May. This is an even more staggering figure because the average includes condos which have a median price of $365,000. In addition the average Maui sales price on detached homes is now $976,000. Our local Realtors expect to see this number go above the million mark, so they are suggesting that you buy now.

This Week, Realty Times TV Viewers Asked:

Frank in Tennessee asks: We came across a beautiful brand-new home. We fell in love with it but found out that the property tax would be about $8,000 a year while other houses in the same price range had taxes of $3,000 to $4,000 a year. Why is it that the property tax on the new home is so much higher?

Answer: It's not so much that the house is new, it's that the owners are new.

There are several factors which can hold down property taxes. For specifics, ask about local property tax policies. For example: First, if there's an assessment every three years instead of annually then the property tax for other homes may be based on old values. In today's fast-changing market a value that's several years old could be significantly lower than the current price.

Second, there may be a cap on residential property tax increases. The result is that the longer you live at a given address, the greater the cap impact over time.

Third, some owners may have lower rates -- think of those aged 65 and over.

Warren in Nebraska asks: Does it or doesn't it make sense to put money down or prepay your mortgage? Suppose that I have available 10 or 15 percent to put down or should I purchase with zero money down and invest my cash elsewhere?

Answer: If you buy with little down, you will have higher monthly costs because you'll need a larger loan. Also, you'll be required to pay for private mortgage insurance. The question then becomes -- what can you get by using the money elsewhere?

As to prepayments, the usual issue is not do I put $100 toward reducing my loan each month or $100 toward paying down my credit card bill. Instead the issue is that money often disappears on frivolous purchases if not specifically set aside for mortgage prepayments.

Stephanie from Idaho asks: The house I'm interested in is currently in foreclosure. I have spoken with the seller briefly. Her house has been appraised at $150,000 to $170,000. What do I look for and what questions do I ask?

Answer: Before going further, why not speak with local brokers? You may be able to acquire a property for much the same price but with guarantees regarding condition. The process of buying a home is too complex to have a short list of questions. Instead, ask if brokers can help in the transaction.