At the beginning of 2009, mortgage rates were at historically low levels. In fact, the mortgage rates were at the lowest point America has seen in approximately 40 years. By the end of the summer, mortgage rates began to creep back up. By November, mortgage rates plunged back to near-record-low levels. Today, current mortgage rates are at the highest point since August.

Prospective homeowners experienced a combination of record low mortgage rates and unprecedented federal tax credits, while existing homeowners benefited from the low mortgage rates by refinancing, saving tens of thousands of dollars over the term of their mortgage loan. Although the $8,000 first-time homebuyer tax credit and the $6,500 "move up" homebuyer tax credit remain viable options until April 30, 2010, the prospect of purchasing a home or refinancing an existing home is quickly becoming more costly as current mortgage rates continue to rise. Mortgage and real estate analysts believe the emergence of the housing market will slow or stall as current mortgage rates rise to almost 6%, where they were prior to the mortgage crisis. That said, if you've been sitting on the fence debating whether or not to purchase a home or refinance your existing home, this information should serve as motivation.

Typically, the period after New Year's is slow in the mortgage industry. By watching what happens to current mortgage rates in the first few days immediately following the holiday, it may serve as a good indication of what to expect as the Federal Reserve winds down its commitment to purchase $1.25 trillion in mortgage-backed securities by the end of the first quarter of 2010, which ironically is the same time the federal tax credits will expire. As the housing market becomes more expensive for borrowers, the recovery of the U.S. economy as a whole may be affected.