Mortgage Rates Dropping Fast
The Federal Reserve bond-buying binge may bring mortgage rates to their lowest levels since World War II. On the news that the Federal Reserve would buy as much as $300 billion of long-term U.S. Treasury securities, the rate on a 30-year fixed mortgage fell to 4.75% from around 5% on Wednesday.
Record Low Mortgage Rates Helping Homeowners Refinance
Still, the low rates–on top of the $8,000 homebuyer tax credit and price cuts on homes–may not be enough to entice buyers. As the Bloomberg story points out: If you’re worried about losing your job, buying a new home isn’t on your list of priorities. Plus, even if you’re game to jump into the market, tightened lending standards and new restrictions from Fannie Mae are making it difficult to get home mortgages.
The lower mortgage rates are hardly a game changer, writes analyst Josh Levin in a Citigroup research note on Wednesday. “We continue to hear from homebuilders about the inability of potential buyers to source even the minimum 3.5% down payment necessary for an FHA home loan. Also, homebuilders have run sales in which they have agreed to sponsor low mortgage rates and the uptick in sales has typically been marginal,” he writes.
And some folks are waiting out the market, hoping home prices have farther to fall. See the rest of the article > - Article written By Emily Friedlander