Mortgage rates have been so low and accommodating that total home sales surged in October as families took advantage of the affordable atmosphere.

Consumer spending has kept the economy moving, and when initial holiday sales were better than expected, financial markets reacted with enthusiasm. It was this potential pick-up in the economy that caused interest rates, including mortgage rates, to drift upwards this week.

For the typical family, home equity accounts for the bulk of their wealth.

The GDP data was weak, but the key is new home sales. The Fed right now has one thing to worry about, and that is the housing sector. And this number must give it a big relief.

That's the real bear case -- rates rise in the United States, exasperating home and car sales. For the government to bail the economy out, there would be more massive deficit spending.

That said, January housing starts were the highest in over 20 years, and that is based on higher rates than we are currently experiencing, ... All in all, the little run-up in rates that occurred this week will not be enough to cause a significant slowdown in current housing market activity.