Rates have settled back into the mid 4% range for a 30 year fixed rate mortgage today (for borrowers with A credit).

It has been a bit of a see-saw the last two weeks with the political turmoil in Italy sending interest rates lower right after the Memorial Day weekend, and now settling in the mid range of the most recent high and the low of that Tuesday.

Overall economic numbers have been very strong, and growth estimates for the U.S. economy in the 2nd quarter are exceeding 4.0%. That would be a huge accomplishment considering there have only been about 25% of quarters since 1990 to reach 4%, roughly 26 out of 109 quarters, and we averaged 2% or less annual growth from 2009-2016.

Housing thrives with a robust economy, not a gang busters economy with 5-6% growth that is highly leveraged and racing towards a bubble.

Current 3% growth rates are very healthy. There isn’t too much leverage in the economy, but enough growth that wages will rise, and hard assets like real estate can appreciate.

What does this all mean? Rates are on the rise, mid 4’s, and rising.

As a comparison, six months ago a 30 year mortgage with A credit was 3.75%. So, there has been a significant move upward…

However, if the economy beats estimates, and the numbers continue to grow there will be more pressure on bond rates as the Federal Reserve will have to raise rates faster which will create higher mortgage rates.

Whether or not higher rates mean lower prices for homes or topped out value remains to be seen.

If the economy is growing and more people are working there will be more demand for homeownership.

The way it stands now we are in a sweet spot, rates aren’t too high, we have a very good economy, and inflation is tame.

This all bodes well for housing, especially if sellers ultimately succumb to the pressure of rising values and the threat of higher rates, and bring more inventory to the market.

• If you’re on the fence about selling your house, now might be a good time to pull the trigger before rising rates cause home values to decline…

• If you’re thinking about buying a house sometime soon, now might be the perfect time to get pre-approved and lock in your terms before rates move higher…

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