The recent rise in interest rates is a good news, bad news event.  Rates have jumped almost a percentage point in the past couple of weeks which is not completely bad news for prospective home buyers.  The reasons that interest rates are low are because the economy is in trouble and there is not confidence that it will improve in the near future.  When interest rates rise that is one indicator that the economy is on the mend.  Financial institutions feel confident that they can get a way with increases in rates because there is a demand for the money and people are willing to go out on a limb and borrow again.

Mortgage rates are still lower than they were at this time last year and way lower than the 17% of the early 80’s.  I had a 10 1/2 % mortgage in 1985.

There are some indicators that the economic downturn is slowing and actually turning around.  Job losses slowed, private equity is investing in financials, and the stock market is up nicely.

So…yes…you will have to pay a little more for your mortgage money, but now you should have more confidence in your home purchase.