All Posts tagged low mortgage rates

Have you wondered why mortgage rates have remained near record-low levels for so long?   I know I have.  Rates on a fixed 30-year mortgage averaged 3.71% for week ending June 14, according to a recent survey . . . and before that, rates had broken record lows for 6 weeks in a row.

It doesn’t really make sense for these low levels remain while housing conditions slowly improve.  If demand in the housing market increases, logically one would think that the cost to borrow money to buy a home would increase as well.   Apparently, it ain’t necessarily so . . .

Consider that there are numerous factors that affect mortgage rates, including the overall economic picture across the U.S. and overseas and policy decisions made by the U.S. Federal Reserve.  Also, improvements in the U. S. economy can influence mortgage rates, but domestic news has not been positive enough to drive the rates any higher.  Home prices have stopped going downward, but are not appreciating at a rate that is the norm, historically.

Mortgage industry experts’ projections have the 30-year fixed rate mortgage ending the year at a 4.2% average, which is still relatively low.  Housing recovery is still in its early stages and there are obstacles yet to face, such as the drop in median household incomes and foreclosure inventory that’s projected to hit the market.

Basically, the upshot of all of this is – that the low mortgage rates are not likely to go away soon.  And that’s a good thing because many would-be buyers are hesitant to jump back into the housing market and lack of job stability hinders some who might otherwise make a purchase.

It’s a good idea to consider refinancing right now and it would be wise to take action sooner than later because the rates will eventually start creeping up again.  These sure are unsettling times for many Americans.