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.