More and more evidence is appearing that the US economy is emerging from, what may go down in history as, the Great Recession. Many segments of the economy revealed more signs of strength last month. The respected ISM Manufacturing Index moved up to 60.4. This is the highest reading since 2004. While consumer attitudes still are showing signs of trepidation, Retail Sales continue to climb. The two areas of the economy that have been of great concern are beginning to show some improvement, although both housing and the labor market are far from healthy.

On the housing front, existing and new home sales continue to grow. However, there is a reasonable chance that much of that growth has been due to various stimulus programs that have now expired. Readings over the next three months will be critical to ascertain whether the housing market has gained enough momentum to carry itself forward, or whether it will slide back, pulling the overall market with it. Jobs are again returning to what still remains a fairly bleak labor landscape. While 290,000 new jobs were created last month, estimates of the under-employed, and those who have simply given up on ever finding a job, are still significant.

With all the good economic news, mortgage rates would generally be trending upward, but over the last week, other concerns have dominated market news. In an effort to rescue Europe's troubled currency union, the European Union passed a $1 trillion aid package. Debt levels in Greece, Spain, and Portugal are driving additional international fears. At what couldn't have come at a worse time, some type of glitches caused a near 1,000 point drop in the Dow Jones. Additionally, the disaster in the Gulf is bring even more worries.

Mortgage rates continue to hover at extremely low levels due to events beyond the economy. The Fed continues to maintain that it will keep rates low. However, it is worth noting that if the US economy continues to heat up, and international concerns fade, we could quickly enter a period of increasing mortgage rates.