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05:13:06 am
Current Mortgage Interest Rates - New Guide To Understanding Interest Rate Trends

In relation to how the CPI (Consumer Price Index) affects interest rates, the Loan Love article explains Released around the middle of each month, the CPI is one of the primary indicators of inflation. To determine the CPI, analysts look at the price of thousands of products within the last month to determine how those prices have shifted. When the CPI is high or theres an overall increasing trend in the CPI, thats considered an inflationary indicator, which can cause interest rates to rise. Conversely, a lower CPI can result in a drop in interest rates. Similarly to the other two indicators, payroll employment affects inflation but in a different way. This is reflected as data released on the first Friday of every month showing information on employment, working hours and earnings. Higher rates will show an increase in inflation, while lower numbers will show a decrease in interest rates.
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With Mortgage Rates In A Holding Pattern, What Will Housing Prices Do?

Follow Comments Following Comments Unfollow Comments After rising by more than a full percentage point from early May till the end of June, 30-year mortgage rates have more or less leveled off. However, the impact of higher mortgage rates on the housing market is still unknown. On July 30, the latest figures for the S&P/Case-Shiller Home Price Indices showed that the housing recovery continued in May , and that their 10-city and 20-city composites posted their strongest year-over-year increases since early 2006. However, since those indices represent three-month averages ending in May, the latest figures just barely overlap the rise in mortgage rates. Thus, it is too early to tell what impact higher interest rates will have on home prices. Mortgage calculators and other inputs In part, the relationship between mortgage rates and home prices can be represented on a mortgage calculator . For any given level of monthly payment on a loan calculator, if you increase the mortgage rate the total size of the loan will shrink. That smaller loan size indicates that the lower price point that consumers can afford at that level of payment. However, there have been several instances historically when home prices have gone up despite rising mortgage rates. Clearly, there must be a factor at work here beyond what you can see on a loan calculator, and that X factor is consumer wealth. If economic growth is improving , then consumers should be getting wealthier and can afford higher mortgage payments.
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