While mortgage rates continue to hover near 5 percent, expect rates to rise in the near future. According to Lawrence Yun, chief economist for the National Association of Realtors, a resurgent U.S. economy combined with growing federal deficit will nudge mortgage rats higher over the coming months. In his latest projections, Yun said 30-year of the year and maybe even 6.5 percent by late 2011.

While such rate increases may seem minimal, each percentage increase can have significant ramifications on purchase power. That's because each 1 percent increase in mortgage rates erodes total buying power by 10 percent. So, if you are in the market for a $300,000 house, and rates increase from 5.0 percent, you'll need to adjust your price point down to $285,000.

The Group Inc. Real Estate. Economist: 30-year mortgages to reach 5.6 percent by end of 2010. Volume 34, No. 6.