Based strictly on my personal experience with recent buyer clients... Rates rock! Plus, a great personal credit rating pays off. My buyer 1 was quoted 5.8% and locked at 5.75%. Buyer 2 was quoted 5.70% and we're waiting for him to lock that stupendous rate as we speak.
If you've been thinking, "I'm gonna wait for home prices to drop some more" I'm telling you, DON'T WAIT. If you're going to keep your home for 3 to 5 years plus, and can really afford a mortgage payment right now, then don't wait any longer.
Why? Because what we've got lately is the perfect storm of coincidences for hesitant buyers -- anxious sellers dropping the price and hefty rate drops. Take your average loan of $250,000 at 6.25%. The monthly payment on that is $1539. Drop the price to $240,000 and the payment is $1477 a month. But if you also calculate in a rate drop ($240,000 at 5.7% instead of 6.25%) your payment is only $1392.
Hello my hesitant buyers! You've been waiting for price drops, and we've had 'em. Now with the rate drops of the past few weeks, you're saving $147 a month.