Many real estate prognosticators have been

Many real estate prognosticators have been worrying about the slowing of the appreciation rates across real estate markets nationwide, scaring many buyers out of the market. The Office of Federal Housing Enterprise Oversite released its 2nd quarter figures on average housing prices this month and many market watchers jumped on the "dropping prices" bandwagon.

The astute buyer, however, watches the prices and the interest rates adjustments together and then makes an offer at the optimal time to get the best house for the best price and terms.

Headlined "House Price Appreciation Slows," the OFHEO report showed that prices nationally are not dropping, rather the rate of growth has slowed. On average, the houses in the 2nd quarter were 10 percent more valuable over the same period last year. So consumers and economists have on their worry hats about the future. Understandably, none of us like to see an investment stop growing; however, for the buyers, this slow in appreciation is good news.

I've always held on to the belief that there's not a lot you can do about the future, so you have to live and make decisions based on the facts you have today. The reality about real estate, is that sometimes you have to buy when your life situation dictates it, not when the "price is right." However, for buyers who have been on the sidelines, the time may be right to hit the iron of making an offer, so to speak.

Have you been watching the interest rates lately? Bankrate.com has its average 30-year fixed rate at 6.4 percent -- a drop of 3 basis points in one week and the lowest level all year. In addition, for those willing to pay more points, you could get a rate under the 6 percent threshold. Meanwhile, if the prices in your area are about to flatten before beginning their next cycle upward, and you MUST buy now, your waiting may have paid off -- if you jump over the fence of indecision and get a contract written now.

Earlier this year, rates were standing at 6.8 percent. The drop of 4 basis points since then could save a shopper hundreds or thousands of dollars per year on a home mortgage, depending on the loan amount.

At 6.4 percent, the principal/interest payment on each $100,000 borrowed is $625.51 -- that's about $25 less per month than when the interest rate was at 6.8 percent a couple months ago.

Thus on a $400,000 loan amount, your payment would now be $100 less per month -- that's a savings of $1,200 per year (more than $6,000 over the next five years) if, and this is the big IF, you get off the fence, lock in your loan and make an offer on that house you've been waiting on.

Watching the interest rates as well as housing prices in your market is the 20/20 Vision of the real estate market. Look to the future. Buy when prices are stable with a low interest rate and then hold on for the ride. According to some forecasters, this month may be the month buyers should get off the dime.

The Financial Forecast Center, a market research group in Chicago that monitors and forecasts indexes, interest rates and various other market data, predicts the average national interest rate will climb beyond the highest rate this year to 6.97 percent by January 2007.

If that's the case, that money mentioned above will then cost a buyer $663.29 per month for every $100,000 borrowed. For a $400,000 mortgage, that would then be over $1,800 per year more in monthly payments for the same amount of money (assuming your favorite house is still available and that the price hasn't gone up again).

If you're waiting for prices to hit bottom, it could happen while you wait or you could create your own "bottom" price by making an offer now before interest rates start their upward climb once again. Get the house you want for the price you want at today's interest rate.

One of the most remarkable areas of real estate speculation now concerns the areas hit by Hurricanes Katrina and Rita. NBC News reports that "it's widely believed here that developers will soon buy up whole blocks of destroyed homes to make room for lucrative casinos, condos and entertainment complexes. But in damaged low-income neighborhoods, renters fear they will be edged out for good." If prices on Wall Street today reflect future economic prospects, then what is it that real estate pricing represents? Why is one measure rising while the other is settling like loose feathers in a pillow factory? Part of the answer, I suspect, concerns the psychological value of real estate. A home is more than an investment, it's that secure place away from the world's troubles -- everything from traffic congestion to world events. Thus people are willing to put more into a home because it is, in a sense, more than housing.

That said, if we have generally increasing home prices and generally decreasing wages, someone is being left out. Reduced values on Wall Street also mean some people will have fewer dollars for down payments. The comforts of home can only go so far and in an era when the cost of heating and cooling is soaring, barn-like houses with more interior space than Carnegie Hall are destined to become the SUVs of real estate. What to do? If you have an ARM or one of the loony high-risk loans with low payments now and vastly higher payments tomorrow, take a look at fixed-rate mortgages. And if you're in the market for a home, think modest -- such properties are apt to be most in demand once the financial dust settles.