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Mortgage rates began to rise after Federal Reserve Chairman Ben Bernanke first signaled that the Fed might reduce its bond purchases later this year. The purchases have helped keep borrowing costs low. Rising home prices and more construction have boosted economic growth and created more jobs. The housing recovery has provided crucial support to the economy when other drivers, such as manufacturing, have struggled. However, gains in home prices may be starting to level off. Prices jumped 12.1 percent in June from a year earlier, according to the Standard & Poor's/Case-Shiller home price index released Tuesday. That's slightly slower than May's 12.2 percent year-over-year gain. But price increases slowed in June from May in 14 of the 20 cities tracked by the index. The stabilization in prices isn't necessarily a bad thing, economists said, because it could keep homes affordable and help prevent a bubble from developing in the housing market.
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