{Growing Economy Means Higher Rates}

Mortage interest rates are at an all time low, but analysts expect them to start climbing soon.  30 year fixed rates may rise to 6%  by December and to about 6.5% at the end of 2011, according to the National Association of Realtors.  Macroeconomic factors--such as the continuing high U.S. budget deficit and the recent improvement in home sales--are all contributing factors to the climb. 

Additionally, if the U.S. government if facing problems with borrowing funds and has to increase interest rates in order to attract investors to purchase U.S. debt, then the remainder of the private sector will also have to absorb the cost of higher interest rates. 

Fortunately, relatively benign consumer price inflation will prevent lender rates from skyrocketing.   Although rates are set to increase modestly, it is also an indicator of the current direction of our economy.