ARE LOW INTEREST RATES a thing of the past.  Most analysts believe so and believe the interest rate will hit 6% over the next 8 months!  Just in the past week or so interest rates have increased over 1/4 %. WHY?

First, on April 1st, the Fed ended its program to push mortgage rates down by buying up mortgage-backed securities. 

Second, Good economic news.  People are feeling better about the economy, the stock market is rising, consumer spending is up, unemployment is no longer rising, etc.

So what does this mean to home buyers and sellers.  Well.. its all about affordability.  If you get a $300,000 mortgage at 5%, this will cost you about $1,600/month (principal and interest only).  However, if the interest rate was 6%, and you wanted to keep the same payment, you could only afford a mortgage of $270,000.  The ONE percent increase in interest rate, actually cost you $30,000 in how much home you can afford. 

My advice would be to potential homebuyers..  if you are considering buying a home, you may have missed your chance for INCREDIBLE interest rates, however, you haven't missed your chance to get a GREAT rate and still get either $8,000 or $6,500 FREE government money.. but time is running out.  GET OUT AND BUY TODAY!

Derek Gutting, The Gutting Group, Keller Williams Realty, www.GuttingGroup.com.