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Mortgage Rates Hit 7-Month HighThe housing market has seen significantly more activity in the last year largely because more buyers are being drawn in by interest rates standing at or near their lowest points ever, but that might soon change if the newest trend holds.

Mortgage rates climbed to 3.85 percent for 30-year fixed loans this week, the highest level seen in the past seven months, according to the latest industry survey by Bankrate. That’s up from the 3.73 percent observed last week, reportedly driven by significant job growth and other economic data for businesses. The current rates are the highest seen since the 3.91 percent in the week ending August 22, 2012.

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Free Credit Check & MonitoringMeanwhile, rates for 15-year-fixed-rate mortgages also grew, to 3.03 percent from the previous week’s 2.96 percent, the report said. There were mixed results with adjustable-rate home loans, though, as three-year terms saw rates fall to 3 percent, while those for five- and seven-year periods rose to 2.82 and 2.99 percent, respectively.

Despite the increases, though, it should be noted that interest rates below 4 percent are still considered quite affordable and could be as little as half those seen by borrowers prior to the recession, the report said. In fact, the last time they were even above 5 percent was April 2011, when rates for 30-year fixed-rate loans averaged 5.07 percent. Under those terms, a loan worth $200,000 would carry a monthly payment of $1,082.22, but under the current rates stands, instead, at $937.62. Those who refinance from rates seen less than two years ago, consequently, can expect to save about $145 per month.

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Some experts have expressed fears that rising interest rates might force some potential homebuyers to pull out of the market because they were drawn in largely by the cheaper loans, but it’s important to note that even as home values have increased across the country on average, they’re still extremely low by historical standards. Also, rates should remain artificially low for at least the next year longer, thanks to the Federal Reserve Board’s bond-buying efforts, which are intended to lower rates and encourage buying. The housing market is generally seen as a driver of the economy as a whole, so changes in the one may necessarily effect those in the other.

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