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How will you know inflation's back?

'Home' in on inflation trends
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Home in on inflation trends

Housing prices are still dropping in much of the country, according to the Standard & Poor's/Case-Shiller Home Price indexes. But buying a home is getting more expensive because mortgage rates are on the march.

The average interest on 30-year, fixed-rate mortgages recently surpassed the 5 percent threshold in Bankrate's weekly survey of large lenders. And while it has fluctuated, it has remained well above the record lows of last fall.

Does that mean inflation is back? Not necessarily, says Robert Schmansky, president of Clear Financial Advisors in Royal Oak, Mich. But it could mean more home lenders are fearful that inflation, like an unwanted house guest, will be knocking on the door soon.

"The fact that rates are rising could be due to a signal of greater expectations for future inflation," Schmansky says.




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