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Will this latest increase in mortgage rates impact the real estate market?

Of course. That’s like asking if the sky is blue or if the White House is white. The question is, can you take advantage of these increasing rates now, while they are still relatively low? Step 1, know what your home is worth and what your equity position looks like. Click here for a free home value report from Neighborhood IQ. Step 2, contact a local mortgage broker to explore your options.

The reality is that rates may continue to rise, and while they are nowhere near what they were during the Carter administration, every point saved, is thousands of dollars in your pocket. Why wait when you can make a move today. The following is a snippet from an article written by Shaila Dewan of the NY Times. For the complete article, click here.

The gains added to months of stronger showings in housing, a market that can infuse the economy with spending on big-ticket items like furniture and dishwashers. But the data released on Tuesday covered a period before comments last week by Ben S. Bernanke, the chairman of the Federal Reserve, caused a further jump in interest rates, raising fears that the market’s momentum could stall.

On Tuesday, many housing experts shrugged off that concern, noting that the effect of a single factor like mortgage rates would be tempered by other forces like prices, wages and changes in employment. Moreover, any rise in interest rates could cut both ways, with some potential buyers encouraged to try to make a deal sooner to get ahead of further increases.

For now, though, the biggest factor in the market, real estate agents say, is a low number of homes for sale, and that did not change after the Fed’s announcement.

“For our low-$100,000 buyer, it’s almost impossible to find a house right now,” said Renae Jackson, an agent in Houston, recounting a flurry of bidding wars. She acknowledged that if mortgage rates increased too much it would cause a pullback, but said she believed “whoever it is” that controls interest rates would be cautious.

“I don’t think they’re going to take it that high that fast — they don’t want to see the economy crash again,” she said.

Mortgage rates are not specifically under the control of the Federal Reserve, and they are subject to a wide variety of market forces. But they remain near historical lows and home prices are still well below their peaks in most markets, meaning that housing is still relatively affordable for many Americans. Stuart A. Miller, the chief executive of the Lennar Corporation, one of the country’s top home builders, credited recent gains to an improving economy, pent-up demand and a severe housing shortage after so little was built during the recession.

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