I agree.  Even if the home prices remain the same, the increase in interest rates alone is enough to inform the buyers that they should buy now.  Also, if they buy now, there is a high probability that they will build equity within the year.  It is a win win situation to buy now vs next year: lower rates and opportunity to build equity.

You are absolutely correct dear Inna.  It is a win-win situation for both buyers and sellers.