According to Freddie Mac, interest rates dipped slightly again this week, keeping rates near record lows. Rates for a 30 year fixed loan hover just above 4% at 4.10%, down from last week’s 4.11%. Rates for a 15 year fixed loan remained the same as last week’s coming in at 3.38%.
Rates are near the lowest ever recorded with rates three weeks ago bottoming out at a mere 3.94% for a 30 year fixed mortgage. Even with the best rates we might see in our lifetime, consumer confidence is low. As a result home owners are not jumping to refinance their current home loans and with the housing market still in crisis many potential buyers are staying out of the market.
Senior U.S. strategist at TD Securities in New York Millan Mulraine said:
At this stage, the problem with the housing market is not rates. The problem is potential homebuyers continue to sit on the sidelines while waiting for more attractive entry points for prices, and credit conditions continue to be tight.
Those who may want to take advantage of these low rates may not be able to. With many homeowners still sitting in homes with underwater mortgages coupled with record high unemployment rates and a still sluggish economy, the fact is many people cannot qualify to refinance or purchase a home. Banks continue to tighten lending criteria which only adds to the difficulty.
In other housing news the Commerce Department’s figures showed that sales of previously occupied homes took another dip in September. On the brighter side, sales of new homes did rise slightly during the month after having been on a steady decline the previous four months.
Adding to the already dismal news, home prices took another dip during the month bringing today’s average home price down another 10% from last September. That is the largest slump reported over the last two years.
In the week ending October 21st the Mortgage Broker’s Association reported that the home loan application index did rise slightly for the week, up 4.9%. This increase comes after the previous period’s decline where applications had dropped 15%. They also reported that the purchasing gauge climbed 6.4% last week and that refinancing also rose 4.4%.