Interest Rates Up - buy or wait?

30 year fixed rates are now up to the highest level since October. With Portland real estate flat to soft in the last 6 months, one may feel they have missed a good buying opportunity. Rates were hovering around 6 or even in the high 5's for most of this year. Now 30 year fixed is at about 6.375%.
Wait to buy? Or buy soon?
A $400,000 home at 6.375%- 30 yr with a 20% down payment costs $1996 per month.
A $400,000 home at 5.75%- 30 yr with a 20% down payment costs $1867 per month.
A $129 / month savings before tax write offs.
In this soft market, offers are coming in frequently at $10,000 to $20,000 under asking price.
So that $400,000 home may now cost you $385,000 at 6.375%-30 yr - equals $1921 per month and the down payment is reduced $3000 to $77,000.
So you have a payment about 1/2 way in between the 1st two examples- and saved another $3K.
This shows that you can still take advantage of the combination of low prices and interest rates. It also shows that LOW RATES really make a difference and can be more powerful than a one time savings of $10,000 to $20,000 off the asking price.
Conclusion: Yes , we missed a good interest rate opportunity, but the soft market can still offer an chance to pick up a good buy. And these rates a historically below average.
So get out there and make a low offer before rates climb higher. And remember the power of a 1/2 to 3/4 percentage point drop in rates.