By LOREN STEFFY

Somebody should tell the market the party's winding down.

It stands at the end of the bar, ordering round after round, unaware that the bartender is washing up for the night.

The Standard & Poor's 500 Index has risen almost 11 percent during the past three months, even as signs have mounted that inflation and interest rates are rising and growth is slowing.

The steady clink, clink, clink of the rising 10-year Treasury bill during the past month is the first tip-off that closing time is nigh.

The benchmark 10-year note closed at 5.17 on Friday after hitting a five-year high of 5.33 earlier in the week. It's up from 4.7 percent a month ago. Analysts are predicting that rates, which have climbed almost 100 basis points since February, will continue to rise.

Because the note is an indicator of mortgage rates, the increase is bad news for homebuyers with adjustable rate mortgages, especially those with the hefty increases built into some subprime notes. Refinancing isn't going to be cheap.

Lenders, squeezed by the subprime fallout, already have been tightening loan terms. The national average for a 30-year fixed mortgage is now almost 6.75 percent, according to Freddie Mac, the country's biggest buyer of mortgages. It started the year just below 6.2 percent.

For the past three years, low rates and easy-to-get mortgages created quite the economic hootenanny. Homebuyers weren't the only partyers, though. Companies basked in cheap credit, which goosed corporate profit and enabled some of the biggest buyouts in history, from Kinder Morgan to TXU.

The rise in T-bills was just one sign that things were settling down. Last week, the Labor Department released a report showing manufacturing costs rose more than expected.

Growth, too, is slowing. The economy grew less than 2 percent in the first quarter, its slowest in four years, and economists surveyed by Bloomberg News predict an expansion for all of 2007 of just 2.1 percent, the slowest in five years.

The last call came with inflation numbers released Friday morning. The market loved them because the "core" rate for May rose a mere 0.1 percent from April, which was less than most economists forecast. But compared with a year earlier, the consumer prices rose 2.2 percent, which is slightly above the 1 percent to 2 percent comfort zone of Federal Reserve Chairman Ben Bernanke.

The core numbers have been helped by declining prices for homes, cars and clothing.

But core inflation is one of those "let's assume"games economists love to play. It strips out the cost of food and energy.

For those of us who aren't economists, who simply pay our bills every month and try to make ends meet, those two numbers are a growing concern.

Both have been rising. They are the two-headed monster of our oil addiction, gnawing away at our checkbooks.

Gasoline prices, of course, are well into their seasonal march. In May, pump prices rose 14 percent from April, according to the American Automobile Association. In recent weeks, they've eased from a national average of $3.23 high on May 24 to $3.03 on Friday.

The federal Bureau of Labor Statistics reports that overall energy prices, including electricity, have risen 71 percent on an annualized basis during the three months that ended in May.

We haven't seen a jump like that since hurricanes Katrina and Rita devastated the Gulf Coast.

Energy rose more than any other item in the Consumer Price Index during the year that ended in May, the BLS reported.

Food, meanwhile, is rising, too, because more corn is being used to produce ethanol, the magic elixir that, with enough government subsidies, is supposed to solve our energy woes.

Corn, along with its derivatives such as sweeteners, is among the most pervasive ingredient in the American diet. It's in soft drinks, it's in dog food, it's in breakfast cereal, salad dressing and cans of baked beans.

It's fed to steers and pigs and chickens and cows, which drives up the price of meat, eggs and milk.

Ethanol may not be doing much to quench our thirst for oil, but it's giving us quite a hangover at the supermarket checkout.

If you factor in the higher costs for food and energy, inflation rose 2.7 percent.

Economists don't care about that number, and neither does the market. The Dow continues its sprint toward 14,000. It closed Friday at 13,639.48.

Those of us who actually buy things are reaching for our wallets and finding ourselves a little short. But at the end of the bar, the market parties on.

For all you buyers that are sitting on the sidelines writhing in indecision as to whether to purchase that new home, heed my call. I have lived a long time and I know when to buy Real Estate. It is time for you to call your favorite Realtor and get back into the Home Search Mode.

The housing market is IN A SLIDE, prices are coming down, Builders and some sellers are in Crisis and need to sell. Interest Rates are still reasonable. All trends point to a recovery in 2008 and a turn toward higher prices. This is the time to buy.

Look around you. Gas prices are high, groceries going through the ceiling, BUT HOUSING IS COMING DOWN!

SO CALL YOUR REALTOR AND GET LOOKING NOW...THERE ARE BARGAINS TO BE HAD!

The Borland Team

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Kevin and Stephanie Borland
Venture I Properties
675 Douglas Avenue
Altamonte Springs, Fl 32714
Phone: 386-848-4341
Cell: 386-848-4361
Fax: 386-232-7086
Email: theborlandteam@cfl.rr.com
Website: http://www.theborlandteam.com/