Mortgage Rates are on the rise. What's this mean for you?

Freddie Mac, the Federal Home Loan Mortgage Corporation, released data on Thursday highlighting the second consecutive week that mortgage rates have increased nationwide. According to the National Mortgage News, interest rates for 15-year mortgages increased 8 basis points, up to 3.21 percent, while 30-year mortgage rates went up 4 points to 4.02 percent.

What does this mean for potential borrowers? Simply put, it means there will be a decrease in mortgage applications, as has already been reported by National Mortgage News. While the housing market continues to stabilize, the increase in interest rates will shy many people away from applying at all.

Although higher mortgage rates could be bad news for borrowers, it is generally a sign of a growing economy. Mortgage rates are also a sign of the supply and demand for mortgages as an economy strengthens. In an attempt to drawback on the inflation of goods and services, which are plentiful in a strong economy, the Fed will inflate prices on things such as mortgage rates, thus trying to create a balance.

However, it is important to take a closer look at the economy during these times. In a recent article published by the New York Post, columnist John Crudele introduces the idea of a growing economy as a falsity. According to Crudele, the market highs, unemployment rates, and job increases are only affecting “blessed” few – the 1 percent. While he does say that the US economy is experiencing a moderate growth period, he says that it is no way growing at the quickened rate that many seem to think, or that could be exemplified by the rapid increase in mortgage rates.

Buying a home should be approached with ample research and a careful consideration of the market. It’s important to take all sides into view before following through with Valley West Mortgage to get the best rate for you.