News Article From: 07-21-2006
The first article, Mortgage rates hit four-year high, from MSNBC, reports that rates on 30-year mortgages rose this week to the highest levels since the spring of 2002. Freddie Mac reported Thursday that rates on a 30-year fixed-rate mortgage rose to a nationwide average of 6.80 percent, up from 6.74 percent last week. The rise in rates this week was blamed in part on further increases in inflation. The rising interest rates are slowing the nations housing market, but Fed Chairman Bernanke told Congress on Thursday that so far the slowdown in housing "appears to be orderly". A year ago, 30-year mortgages averaged 5.73 percent.
The second article, Fed Chief: Housing slowdown appears "orderly", from the Arizona Republic, reports that Federal Reserve Chairman Ben Bernanke told Congress on Thursday that the once high-flying housing market appears to be experiencing a safe landing. One of the things that Bernanke and his Fed associates are keeping close tabs on is the extent to which a housing slowdown will put a damper on overall economic activity. "We recognize the risk, ... and we are watching it very carefully," he said. The housing market has been a top economic performer. This sector of the economy has racked up record-high sales five years in a row. Rapid appreciation in house prices has made homeowners feel wealthy and has powered consumer spending, helping the economy move solidly ahead. But the cooling of the housing market is expected to contribute to a slower pace of general business growth across America in the coming months.