Effect of interest rate on buying power.

Even though I watch the real estate market closely, I don't really pay a whole lot of attention to the price of small everyday items I purchase. I rarely keep those Costco coupons and only find out about their value when I am in check out line, when the guy in front of me  turns to me and say "You know that they are on sale, right?" Oh Snap! Now I have to pay $2 more for the Margarita Mix. 
I can live with that. 
Missing "the coupon book" at home when getting a home loan can cost you more than a "mere" $2. When interest rates rise and fall,  the effect can be tens of thousands of dollars. It can make the difference of you actually buying that beautiful 4 bedrooms, 2 bath with the upgraded kitchen and large enough a backyard for woofy in a good school district for the Jack and Jill and .........., well,  settling for less. 
At the moment, interest rates are low. Nobody can predict where they will be in a year or even a few months. 
Take a look at the chart below. Brace yourself! I tend to over explain things. (I used to be a science teacher.) 
Say with the income you have, you can afford to spend $1,800/month for housing. (This is the number you should find out after a conservation with your lender) 
When interest rates are 3.75%, you qualify for  a $400,000 loan.
Say you waited and interest rates hiked  to 4%. Now you can only get a loan for $390,000. And if rates go up to 4.75%, now you are only qualified for $360,000
Got the picture? Also, keep in mind that during this time period, home prices have most likely gone up. In Sacramento area, home prices went up 7.5% in 2016. 
That all translates to "Honey, we cant afford THAT house in THAT neighborhood, with THAT size in THAT school district any more." 

Moral of the story: TAKE ADVANTAGE OF THE LOW RATES WHILE THEY LAST. Because they don't last forever.