Categorized | Finance and Mortgage

U.S. Mortgage Rates Increase to End the Year

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Fixed-rate mortgage loans have finished the year with a small increase. While thirty-year fixed-rate mortgage loans are still below four percent, they increased in the past week from their record low of 3.91 percent to 3.95 percent. One of the reasons for the rate increase was the growth in home sales, as well as an improvement in consumer confidence and the unemployment rate.

Fifteen-year fixed-rate mortgage loans also experienced a modest increase, finishing at just below three and a quarter percent. The cause of the increase is certainly good news to realtors and the government, as the level of consumer confidence reached its highest level in nearly eight months. In addition, new home sales hit a seven-month high, and the unemployment rate dropped to its lowest level in more than two years. Each of those factors plays a significant role in boosting the housing market to desired levels.

Many real estate analysts believe that strong job market performance is absolutely essential for the housing market to do well. While foreclosures will continue to cause a drop in housing values and prices, the negative associated effects can be mitigated entirely by a strong employment level.

While the most recent data certainly provides hope and a boost to the overall residential property market, many analysts still believe that true recovery will not be seen in the United States housing market until late 2012 or early 2013. The job market must still continue to improve and show substantial signs of growth for true recovery to be possible.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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