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Rates Rise as Economy Shows Signs of Strengthening
Mortgage News > Rates Rise as Economy Shows Signs of Strengthening
With the busiest season for home sales upon us, interest rates have risen a bit and are expected to continue such a trend. Freddie Mac reported the average rate on a 30 year loan rose to slightly above 5% ending at 5.05%, and fell only a bit on a 15 year fixed to 4.27% from 4.29%.
Signs of a strengthening economy are present. For example, the Associated Press reported that “new claims for jobless benefits came in this week at the lowest in three years, and the unemployment rate has fallen nearly a full percentage point in two months. Americans are spending more and saving less.”
The housing market is trying to rebound from the devastating blow it took a few years ago and trying to follow the lead of the jobless claims and unemployment rates. Home prices are expected to fall somewhere around another 5% and interest rates expected to rise to 5.5%.
Interest rates will still be low enough that homebuyers should take advantage of them, especially with home prices dropping as they are.