After a jump of almost half a percent in early June, for the last month and a half interest rates on fixed rate mortgages have remained fairly steady. 

Last week, the Standard & Poor stock average fell 5%.  Often the stock market slides in advance of slower economic growth.

The housing sector of the economy is down, homebuilders are hurting -- and so are financial companies, including mortgage companies, credit card services, consumer finance companies, and even those that help finance mergers and acquisitions.

Durable goods orders fell 0.5%.  Durable goods are purchases of items expected to last more than a year.  Refrigerators, cars, carpets, airplanes, etc.

Even so, economists are optimistic.  They believe that economic growth in the second quarter will exceed 3%.  Manufacturing is up in the United States, for example. 

But trucking is down.

A trade war could be developing, too.  Congress is very unhappy with China because they appear to purposely devalue their currency, making their manufactured goods cheaper to import than it costs to build things in the U.S.  So the Senate passed a bill that could "punish" China.  The result?  It might cost more to buy things.

That could potentially mean inflation, though that too appears to be under control for now.

During times of inflation, interest rates go up.

During times of strong economic growth, there is more danger of inflation. 

So are economists right?  Or is the stock market right?

You can't always trust the stock market because of the occasional rise of "irrational exuberance" and "cheerless gloom." But you cannot always trust economists, either -- because they focus on numbers and data, ignoring the effects of psychology on the markets -- which become exaggerated during upward and downward trends.

Right now the bond market is saying, things aren't great, but they're not so bad, either.  We just want "safe" investments -- not risky investments.

That's what happens when the future is uncertain.

Interest rates for A-paper mortgages will probably remain stable or slightly increase in the near future.  For those with sub-prime credit or an inability to adequately document income, things will be tight and loans may be difficult to obtain without paying drastically higher interest rates or making larger down payments.

As always, no predictions can be guaranteed.