Mortgage rates set new 2-year high, up dramatically in past 10 weeks

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The average U.S. rate on the 30-year fixed mortgage rose this week to 4.51%, a two-year high. Just two months ago, it was 3.40% — barely above the record low of 3.31%.

Rates have jumped up on speculation that the federal government may slow its stimulus spending. That has some people wondering if rates will continue rising throughout the rest of the year. Even with the gains, mortgage rates remain low by historical standards.

Normally, a rise in interest rates would be expected to slow home sales, but in this case, the rise in interest rates could actually spur short term housing sales as buyers move to secure mortgages before rates rise any higher.

And speculation is that the interest rates will not continue to rise at such an accelerated rate and will likely settle between 4-5%, which will keep housing at affordable levels – which is good news for everyone!

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