Home Mortgage Rates Spike, Prices and Sales Up

An improving economy is good news for homeowners, but not for homebuyers.
1:25 | 08/21/13

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Transcript for Home Mortgage Rates Spike, Prices and Sales Up
new signs this morning that the housing market is heating up. Home sales are showing another monthly spike this morning. Good news for homeowners. Also, a risk that buyers could get burned. With that, our financial contributor, betty lou. You said it, the national association of realtors is expected to show that home sales grew by about 1.5% in july. That's a reversal from a decline in june. Your home, you're making money off of it. In the 20 biggest city, home prices have gone up 14%. Two things are happening here. We're adding new jobs and the low interest rates. As you said, george, they've gone up in the last three months. A 30-year fix-rate mortgage has increased by over 1%. If you have a mortgage on a $200,000 house, 20% down, your mortgage payment would have increased by over $100 a month. That's $1,300 a year. What's driving it? Well, it's interesting because oddly enough, it's because the economy is doing so well. The federal reserve says, we may actually take the training wheels off this economy. Well, pull back on stimulus, that's causing interest rates to rise. We're going to get a better idea of how the fed is thinking. Later today, they're going to release the transcript of their last policy meeting. Don't panic yet, right? The interest rates are historically low. The demand is so high, that economists are saying any slowdown is likely to be temporary. Betty liu, thanks very much.

This transcript has been automatically generated and may not be 100% accurate.

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