Benny Tampol has thought about buying a house in the Bay Area, but to do so the numbers must add up.
"Prices come down and mortgage rates stay at relatively low spot for the everyday person," said Tampol.
Thanks to foreclosures, housing prices have plunged but last week mortgage rates spiked above five percent.
"It's fueling a real buyer frenzy right again for buyers hoping not to miss the boat but everybody is a little nervous right now about how high our rates are going to go and how soon," said Cherie Colon from Windermere Silicon Valley Properties.
Doug Jones has been in the mortgage business for four decades. He says on May 26th, buyers with a conforming loan could have locked in a 30-year fixed rate of 4.375 percent.
Today that same rate is half a point higher. On a $400,000 loan, it means paying another $120 a month or more than $43,000 for the life of the loan.
In the late 1970's, the prime rate was at 18 percent and mortgage rates were easily in the double-digits. But this is a new generation of buyers.
People are used to these historically low rates. Jones says rates are volatile right now but have pulled back from their national average last week of 5.25 percent.
"Here's yesterday, the rates yesterday changed at 9:13, 10:13, 12:17 and 1:50 and yesterday they got better by an eighth all four times," said Jones.
Real estate professionals say a combination of low rates and low home prices have finally given the housing market traction. If mortgage rates do go up, people like Benny Tampol will stay on the sidelines and all bets are off for an economic recovery.