These two indicators often run together. With increased demand for home buys and mortgages, interest rates rise. With fewer people interested in buying homes and taking on mortgages, interest rates fall.
Record low interest rates have not been enough to fire up the real estate market. The most important factor in buying homes is that people have stable jobs. With high unemployment, fewer people can afford to buy homes.
Bloomberg says: U.S. mortgage rates for 30-year fixed loans increased from the lowest on record as home sales rose amid improved consumer confidence and employment data.
The average rate for a 30-year fixed loan rose to 3.95 percent in the week ended today, from 3.91 percent last week, the lowest in records dating to 1971, Freddie Mac said in a statement. The average 15-year rate climbed to 3.24 percent from 3.21 percent, according to the McLean, Virginia-based mortgage- finance company.