Will low mortgage rates fuel a housing rebound?
You’re searching for some good news about the housing market, right? Maybe you should read Lauren Tara LaCapra’s March 12 column on the TheStreet.com.
LaCapra writes that mortgage rates are once again approaching all-time lows. And this, she writes, may spur the long-awaited housing recovery.
We’re all waiting for housing prices to steadily begin appreciating again. We’re all waiting for home sales to rise again, too. The housing market is so crucial to our nation’s economy. Put simply, when the housing market tanks, as it’s doing now, the economy stumbles, too.
You can trace the roots of our current recession to the housing market’s woes. Who doesn’t believe that the seeds for the economy’s collapse weren’t planted by mortgage loan officers who gave out loans to borrowers with bad credit, low incomes and high debt levels? Who doesn’t think that real estate appraisers who overinflated the value of homes, and the mortgage companies that led them to do this, aren’t largely to blame for the massive layoffs and the dismal performance of the stock market?
When LaCapra wrote her column, the average 30-year fixed mortgage came with an interest rate of 5.03 percent. That’s down from 5.15 percent one week earlier and 6.13 percent a year ago. That’s getting close to the record low of 4.96 percent for a 30-year fixed-rate mortgage that we hit the week ended Jan. 15 of this year.
The low interest rates provide yet another incentive to anyone who’s hesitant to purchase a home. Housing prices have fallen, and sellers are desperate enough to make further reductions when buyers push for them. There are an awful lot of houses on the market, so buyers have plenty of homes to choose from.
In short, it’s a great time to buy.
Of course, if you have to sell a home at the same time you’re buying … well, then it’s not such a great time to buy.
Still, it’s nice to read a column by someone who at least sees a light at the end of the tunnel. Perhaps this interest rates can spur the start of a gradual — please let the housing rebound be gradual, not a skyrocketing recovery — recovery in the housing market.
