Here's some actual number crunching that shows why one should not wait too much longer to get into a home. Just to keep to nice round numbers for the purposes of showing how much interest rate changes impact a buyer's buying power will take a $200K loan amount, at 4%. The monthly principle and interest (taxes and insurance would be added to the monthly payment but are the same regardless of interest rate changes so they are not included in this analysis) would be $954.83. At 4.5% the monthly principle and interest goes to $1,013.37 for the same loan amount. That's a 6.1% increase in monthly payment for 1/2% increase in interest rate.
Converting this to buying/borrowing horsepower, a 1% increase in interest rates reduces the loan amount by about 10% to keep one's payment close to the same (the in the field rule of thumb).
To be precise for example the above, the payment of $954.83 is for a loan amount of $200K at 4%. At 5% interest, a payment of $955.54 is the payment on a loan amount of $178,000 (11% less than $200K to keep the payment about the same).
So you can see how interest rates play a fairly significant role in what someone can buy/borrow for "X" amount of a payment budget. As an agent, I have more attention on increasing interest rates pricing some buyers out of the market rather than the increases in asking prices. However at the moment we have both increasing prices and increasing interest rates. For this reason it is of my opinion that buying sooner rather than later is to a buyer's advantage.
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