The mortgage rates have decreased for two consecutive weeks in response to the expiration of a federal tax credit. Due to the expiration of the said federal tax credit, there has also been a decline in the sales of the housing market. And as there was a decline in the sales, there was also the decline in the mortgage rates.
Based on the report of mortgage company Freddie Mac last Thursday, there was a decrease in the mortgage rates from 4.58 percent last week, which was the previous record low, to the current record low of 4.57 percent.
According to Freddie Mac it was the lowest since the company started to follow the mortgage rates since 1971. They added that the last time the mortgage rates were as low as this time was during the 1950’s when there were only, at most, 20 to 25-year mortgage rates.
4fba07bf8c5c0 have already been dropping for the last two months and with this, investors are a lot more concerned to pour money on treasury yields. However, there is a decline in the yields resulting to the decline of mortgage rates as well. The mortgage rates have constantly been setting record lows for over some time now. That is why some homebuyers may have taken advantage of the low mortgage rates in the last 18 months.
However, the issue of unemployment continues to plague the housing industry despite the leeway of low mortgage rates. There are still over millions of American citizens that are not employed. And adding more insult to injury, the benefits of the unemployed were not extended as it currently expired. This resulted to the increasing number of unemployed American citizens that are unable to purchase home with cheap mortgage rates.
Although there was already an increase in the mortgage applications, there was still no significant growth, as they still remain 35 percent below the previous year’s levels.
According to Bankrate.com senior financial analyst, Greg McBride, there is still a low consumer activity between the housing industry and the consumers particularly, the unemployed. The jobless Americans cannot afford to purchase a house even though it has low mortgage rates. Even employed citizens who are worried about losing their employment are not willing to take the risk of buying a house. He adds, “And if an $8,000 tax credit didn’t get buyers to take the plunge, saving $50 a month on a mortgage payment probably won’t either.”
