This article says it all.  Don’t wait too long!  Interest rates, not prices look to be the biggest factor in affordability going forward.  Freddie Mac sees rates reaching 6% by the end of 2010. Also read, Borrowers face 1% interest rate rise.

If you want to refinance your mortgage into a loan with a sub-5% interest rate, better hurry. Your window of opportunity is closing fast.  “Interest rates are up and they’re not going to go down below 5% again,” said Mark Zandi, chief economist for Moody’s Economy.com, not for a while at least. 

A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities.  But the Fed’s program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates. The Fed has already been slowing its purchasing, and that has corresponded with the recent rate increases.

What do you think of rates?  Think they are headed higher?  If so, when?