Mortgage Rates Indicate Improvements for US Housing Market

While the previous years have seen record lows for mortgage rates in the housing industry, the US is finally seeing fixed rate mortgages rise above the 4% mark for the first time in nearly half a year.

While this increase may seem like a warning sign to buyers that the window of opportunity is quickly closing to finance or refinance a home at what has been historically low rates it is also a sign of a stronger housing market in general.

Mortgage rates utilize 10-Year Treasury Notes as a way to track the market and economy. The economy has begun to see an increase of investors moving out of long-term bonds and putting their money into more stocks and short-term investments.

This is a definite sign of the economy slowly getting stronger and the housing industry slowly getting stronger with it. The market sees these record low mortgage rates as being "too low" and recognizes that in order to provide a more stable and better position economically mortgage rates should rise but not spike quickly.

With the average 30 year mortgage rate being at or well below the 4% mark since October of 2011 this increase is definitely a positive sign of things to come. Add to this positive outlook of the housing market other signs, such as the best winter sales of existing homes in five years and an optimistic outlook for the job market the housing industry is seeing an upbeat attitude all around.

Increased Home Sales Helps The Overall Economy

Along with the obvious positive effect of the sale of a home, adding the cost of the home to the economy isn't the only place where more money will be spent. As homes sell, many of the "previous" owners are looking to build new constructions and/or upgrade from the homes they're selling on the current market. Others are finding their "almost" perfect home can become their perfect home with a little TLC and small projects; thereby funding the local retail market and home improvement center retailers.

There is a domino effect with everything in life but especially with financial obligations. The sale of one house can cause a huge domino effect of increasing economic values all around from the job industry to the construction industry to the retail industry. Realizing this you can see the obvious reason for not only what seems to be a positive, more realistic approach in the housing industry for all involved; but buyers and sellers alike will have a more even playing field that will stretch to touch many other aspects of industry & the economy in general.

When the economy was failing, some people were losing their homes as others were losing their jobs. Those who weren't hit directly with these negative impacts had fears looming in the near future for their own economic stability.

These fears kept many people from taking any major leaps and jumps into any financial direction that involved large sums of money; from buying a car to buying a home. Most played it safe, even if their jobs were fairly steady and finances weren't horribly affected by the economy.

During these times many people also chose to rent instead of taking on a mortgage; keeping their economic situation "safe. As we see more jobs coming into the market, houses still coming onto the market from an over abundance of foreclosures and short sales, and mortgage rates still fairly reasonable although not at record lows, renters are slowly making the choice to become home owners again.

These positive changes can only mean one thing economically; a positive upturn in the housing industry is ahead. While we may not see record surges we should see steady increases and positive directions that benefit the industry as a whole.

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