Mortgage interest rates fall again. Are people finally ready to buy?
What will it take to persuade all those hesitant folks to begin making offers on homes again?
Housing prices are falling across the country. Housing inventory levels are high, meaning that buyers have more homes from which to choose. Sellers are desperate, so they’re willing to compromise on everything from price and repairs to closing dates.
And now mortgage interest rates are once again setting the right kind of record: They’re at historic lows.
You can read about the amazing rates in this story in the Kenosha News. Basically, though, mortgage interest rates on a 30-year fixed-rate home loan fell to 4.78 percent for the week ended April 3. Just one week earlier, the rate on this loan stood at 4.85 percent.
Rates on 15-year fixed-rate mortgage loans were even more impressive. For the week ended April 3, they came in at 4.52 percent. That’s down from 4.58 percent one week earlier. One year ago? Those rates stood at a far higher 5.42 percent.
The mortgage interest rate on that 30-year fixed-rate loan is now at its lowest point since Freddie Mac began tracking rates way back in 1971.
Still, despite an uptick in housing sales in February — an uptick that can be explained away as a normal seasonal increase, one that happens every year — the reports from the National Association of Realtors are nothing but bad news: Home sales are going down. Housing prices are falling, too.
So, when will the buyers return? Unfortunately, I think it’s going to take more than falling home prices and historically low mortgage interest rates. The nation’s unemployment rate soared to 8.5 percent in February. It’s unrealistic to ask people to invest in something as huge as a home if they’re unemployed or if they fear they’ll soon be out of a job.
So watch those unemployment numbers. I have a hunch that if they start falling, you must might see home sales — and that long-awaited housing industry recovery — finally begin to pick up steam.
