Mortgage rates? Housing prices? Buckle up. Here is what you need to know.

Higher rates have started to affect mortgage applications. The current rate for a 30 year fixed mortgage is 4.58%. In September, the rate was 3.87%. This jump in monthly payments may seem minimal, however, the difference in buying power is significant. For example, the monthly payment on a $400,000 mortgage at 3.78% is $1,859. At 4.58%, the same monthly payment (keep in mind the monthly payment is based on a "debt to income" ratio) is only enough to borrow $367,400. This means that the average price a homebuyer can afford has declined 8.25% with just a 80 basis point rise in mortgage rates! What will happen when rates go up another 50 basis points? 75 basis points? Home values will be crushe