Though the housing recovery appears to remain strong as home sales hit an annual rate of 470,000––the highest number since May 2008––housing numbers aren’t on a uniformly upward trajectory. June data indicates that housing starts slowed by nearly 10% from May, due partly to higher mortgage rates.
While at a record low at the end of 2012, investor fears that the Federal Reserve will taper its quantitative easing stimulus program has caused mortgage rates to rise dramatically. The average rate on a 30-year fixed-rate mortgage is now nearly 4.4%, according to Freddie Mac’s latest Primary Mortgage Market Survey.
New home sales may be booming now compared to where they were mid-recession, but rates remain far below where it was before the crash and there is plenty of room for growth.
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