Despite continually rising home prices and interest rates, many people are deciding to purchase and finance a needed home now. Or perhaps they are taking action because of those rising prices and interest rates. This was the focus of a study recently completed by Harvard's Joint Center for Housing Studies. Prospective home and condo buyers are looking at those rising prices and rates and are deciding that this is the strategic time to take action before prices and rates rise further.

Even with higher interest rates and home prices crimping affordability, the lure of house price appreciation continues to draw homebuyers to the market, the Harvard study report stated. While national homeownership rates edged down last year, it increased in the West and Northeast where house price growth was the strongest.

Mortgage innovations such as low-downpayment, hybrid and interest-only loans have helped blunt the impact of higher prices and interest rates, the report pointed out. These favorable factors are motivating many home buyers in today's market. The Harvard study, and others, point to the value of applying for a purchase or refinance mortgage soon, and locking-in a low rate while their still available.

Most seasoned experts agree that mortgage interest rates will continue to rise over coming months and years. Here's what Frank Nothaft, chief economist for Freddie Mac, wrote in a new report: Financial markets believe the current rate of inflation is above the Fed's comfort zone, and that will lead to more rate hikes in the future. What was believed to be a vaguely possible hike by the Fed in August is now considered to be highly likely. Change in market expectations is causing mortgage rates to jump higher.

The current plan to enhance and modernize FHA mortgages will help low- and medium-income families to qualify for home financing.