With economic growth starting to pick up in 2013, so will mortgage rates

Home prices are now rising at their fastest pace since 2005. Housing bulls are running again, pointing to rising construction starts, rising home sales and falling mortgage delinquencies.“Low prevailing mortgage rates, the limited supply of existing homes for sale (either due to the few foreclosure completions or the number of underwater borrowers who cannot sell), and the anemic levels of new home construction are facilitating affordability and feeding demand,” noted analysts at Fitch Ratings. “These factors are offsetting weak fundamentals that would otherwise hinder home price growth, such as high structural unemployment and lackluster wage growth. With economic growth starting to pick up in 2013, so will mortgage rates.Mortgage rates directly correlate with economic growth. As the economy grows, so will rates. But is that a bad thing for housing? Actually, its not. Historically, when mortgage rates start to trend upward, purchasers finally “get off the fence” and pull the trigger on that next home particularly with home prices rising. Plus, the uptick in mortgage rates that results from a growing economy will still be relatively low compared to other periods when the housing market flourished. It will certainly dampen the activity of mortgage refinance in Nebraska, but will spur purchase activity.