Rising interest rates continue to plague buyers, particularly those in the entry level price ranges. Higher rates erode buying power for those using a loan to purchase. As rates approach five percent I like to remind everyone that these are still quite a bit lower than the fifty year average so we are not into a "high interest" market just yet. It seems to show as prices on new listings are still strong and homes are still selling in a matter of days. Inventory levels locally are at all time lows. This means fewer properties are available and even as buyers are priced out in the rising rate economy, there are still too few listings to choose from.
Buyers still need to be ready to compete with other buyers in a multi-offer environment. At this point waiting for a market slowdown could end up costing buyers more money. I have written a great deal about the effects of interest versus the effects of price. Even if the local prices were to drop 5-10% over the next year, the people that bought last year at 3% are in better shape than those that buy at 10% less price a year later at 5.5%. More importantly is the timeframe of ownership. Most people will stay in that house for 5 years and if pricing does enter a decline then that might be extended longer. The higher interest rate chews away at your equity position faster than the lower rate.
Barring a total collapse in housing like we had back in 2009-2011 it is better to buy now with rates low then to wait until rates are actually high. A high interest rate market would have rates well above 6% but I don't think we should see the double digit rates we had back in the 1970s and early 80s. The Fed has adopted a much better model for managing inflation money squeezes than we had 40 years ago.
If you are on the financing bubble, find a house fast, write an offer, and get situated before you are locked into another decade of making your landlord rich.