Mortgage rates have been unbelievably low since the recession. Finally, though, they are starting to creep up over 4%. Still very low, to be sure, but higher. So what do higher rates mean? Well, it sort of depends on whom you ask. Some people think that they will drive down the price of homes; if the monthly payment for a loan of the same amount is now more than it used to be, buyers will not be able to afford to buy unless the price of homes falls. Ok, that is a reasonable argument. On the other hand, some real estate experts predict that since rates are still so low, the increase will simply knock out the buyers at the very bottom of the group, not significantly affecting home prices, just marginally reducing the competition. Their view is that prices will remain stable, but volume may drop a little. Still others believe that the job market is improving enough to spur a small improvement in the economy, perhaps enough to offset the higher costs of home loans. As always, economists make various predictions and the rest of us wait and see what actually happens.
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