Federal Reserve Chairman Alan Greenspan said Wednesday extra-low interest rates "must rise at some point" now that the economy is hitting its stride.

Any move by the Fed to raise rates would most likely quickly filter into the consumer economy, driving up rates for mortgages, car loans and even credit card purchases. Coachella Valley mortgage brokers said Wednesday that rates had already started to climb.

Greenspan, testifying before Congress’ Joint Economic Committee, delivered one of his most upbeat takes on the economy: It finally staged a significant rebound in the second half of last year and is expanding more vigorously now.

But with the rebound, some companies are finding it easier to raise prices, Greenspan said.

So far, broad inflation pressures have yet to build, he said. But the Fed, he said, "recognizes that sustained prosperity requires the maintenance of price stability and will act, as necessary, to ensure that outcome."

Pressed by some lawmakers to be more specific on when the Fed might begin raising interest rates, Greenspan gave no direct response.

Mortgage rates, however, have already started to climb and are likely to slowly move up from near historic lows, several Coachella Valley mortgage brokers told The Desert Sun.

"I was on a the phone with a number of clients this morning wondering if they should lock in, and a lot of them have decided to …,"said Scott Simmons, owner of Desert Empire Mortgage in Palm Springs.

Shannon Strange, mortgage broker for Keystone Mortgage Co. in Indian Wells, said she expected rates to slowly creep higher but remain a bargain for the near future.

According to bankrate .com, the national average rate for a 30-year, fixed-rate mortgage climbed from 5.56 percent last week to 5.63 percent on Wednesday.

Greg Berkemer, executive vice president of the California Desert Association of Realtors, said higher mortgage rates were unlikely to cool the Coachella Valley’s sizzling real-estate market.

"I think right now, the increase in prices because of the lack of inventory …has a much better effect on this housing market than a slight uptick in rates," he said

Source Freddie Mac

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