The Greek and European debt crisis helped drive down mortgage rates in the U.S. In fact, rates are near record lows. But according to Stephen Stanley, chief economist for Pierpoint Securities LLC, an improving economy will force government leaders to raise interest rates.
Telltale signs continue to point to an improving economy. Both American Express and Target reported fewer credit delinquencies as Target reported it's lowest delinquency rate in 2 years, while American Express delinquencies declined 34% from last year.
As you can see from the chart above, rates are about as low as they've ever been. A 30-year mortgage for $250,000 at 5% equates to a monthly payment of $1,342 while a 6% rate results in a monthly payment of $1,498, or an additional cost of $156 month. Over 30 years, that 1% mortgage rate increase results in an additional cost of $56,456 in interest payments.