The reality of these market levels is that:

• Relative to rates seen during the past five decades, today's mortgages are cheap.
• Every time rates move up or down the pool of potential buyers is impacted.
• With rates rising it is logical to assume that sales will experience some fall-off if only because the pool of potential buyers is somewhat smaller because with higher rates fewer people qualify for given levels of financing. With fewer bidders and less demand, there is less pressure to increase prices.
• That there is less pressure pushing prices up does not mean prices will decline. It could simply mean that prices will go up but not as much as would otherwise be the case with lower rates.
• Slower price increases might well be good for everyone -- when home prices grow too quickly buyers are frozen out of the market because wages do not go up with equal speed.
• What happens locally and what happens nationally may be different. Real estate is an inherently localized commodity while mortgage rates tend to be similar nationwide.

In looking at my local market I have seen several curious reactions.

Asking prices have declined. Homes are on the market longer. But generally, prices remain lower than a year ago.

Some brokers have apparently never seen a slowing market: One told me at an open house that sales were slowing because of "negative" coverage by a local newspaper. This is nonsense. If you believe that newspapers are causing a down market do you also believe they caused the huge run-up in prices seen in most places during the past few years?

If you would like to see where your local market is headed, take a look at nearby MLS figures. Compare numbers for the past several months. Most MLS systems make such information available from member brokers as well as online and in news releases. Take a look at:

• How many days are homes on the market? Longer average times suggest a slowing market, faster selling times imply a stronger sales.
• How do average listing prices and average selling prices compare? If homes are listed at $500,000 and sell for $495,000, then sale prices are 1 percent below listing levels. Nearing 100 percent is evidence of a good market, normally you would expect to see some separation between listing and sale prices.
• What's happening to average sale prices? Rising prices typically reflect a strong market, however average prices can be misleading -- they may reflect changing inventories and thus may not be comparable.

For instance, if a community sells 300 condos and 300 detached homes, the average price may be x -- whatever "x" might be. If the next year there are 400 condos and 200 detached home sales it may appear that average sales values have fallen. In fact, all that really changed was the inventory mix. Prices seem lower because condos tend to be less expensive than single-family homes and in the second year there were more condo sales.