This week the mortgage market hit the lowest levels. Very low mortgage rates should be good news for U.S. housing market predictions 2010, shouldn’t they? Existing home prices and existing home sales were up in April — one more bit of good news, right? But despite all of the attractive mortgage rates, mortgage applications plummeted following the home buyer tax credit deadline April 30. Plus, numerous homeowners are still out of work, more than 1 million a lot more foreclosures are expected to occur and banks still have yet to put the homes they’ve already seized on the market. The housing market recovery will have to wait. The market might nevertheless get worse.
Source for this article: Mortgage rates near record lows – housing market not responding By Personal Money Store
Mortgage rate trends
The average mortgage rate dropped to 4.72 percent this week, down from 4.79 percent last week, according to mortgage finance business Freddie Mac The average mortgage rate dropped by around 4.72 percent this week, down from 4.79 percent last week, according to mortgage finance business Freddie Mac . It was above what was set last December in 4.71. Mortgage rate trends were lower. The average rate on a 15-year fixed-rate mortgage hit 4.17 percent, down from 4.2 percent last week and also the lowest on record given that August 1991. The US housing market still isn’t responding. According to the Associated Press, the market is struggling without a tax credit of up to $8,000 for first-time buyers, which expired at the end of April. A campaign by the Federal Reserve to cut back borrowing costs for consumers pushed mortgage rate trends down to extraordinarily low levels last year. Rates were supposed to rise following the program ended this spring, but have fallen instead ove!
r the past two months.
The mortgage rate forecast
The mortgage rate forecast will create an economic setback. A jobs report that was released last week showed that private sector hiring was practically non-existent at 41,000 jobs. Investors worried quite a bit about the stock market shifted money to the safety of U.S. Treasury bonds. It was reported by the Los Angeles Times that investors have rushed to buy Treasury securities since late April, within the process driving market yields on the bonds sharply lower. Investors bought $21 billion of the securities at a Treasury auction Wednesday, although they’re paying around 3.20 percent of it. That has definitely pushed down the yield on US treasury debt. The mortgage rate forecast tracks that yield.
Predictions of the housing market 2010
With mortgage rates at near record lows, the number of customers that are applying for a mortgage fell to the lowest level in 13 years last week and was down 35 percent from a month ago, as outlined by the Mortgage Bankers Association. According to MarketWatch, any housing market recovery will likely continue to be slowed by additional homes on the market from “shadow inventory” and “sidelined sellers.” Shadow inventory is what we call foreclosed homes not on the market yet. There are also severely delinquent homeowners who haven’t entered foreclosure yet. This year or next, it is expected that foreclosures will peak.
On hold is housing market recovery
Sidelined sellers are people who want to sell their homes but are waiting for the housing market recovery before trying. MarketWatch reports that about 7 percent of homeowners — representing more than 5 million homes — fall into this category. They may have to wait for a while. In May the US unemployment rate was 9.7 percent. Many of the salaries are frozen or cut. In a National Foundation for Credit Counseling survey of a lot more than 2,000 consumers, 49 percent said that if they ever tried to buy a home they’d never be able to save enough money for a down payment. People underwater on their mortgages, about 25 percent of borrowers, can’t get the financing to move to another house. People who are shopping for mortgages are not only worried about getting a home, but additionally their ability to keep it. Doug Duncan, who’s the chief economist at Fannie Mae, told MarketWatch that within the long run, that attitude is a good thing for the econ!
omy.
We’re finally getting good news.
Citations
Associated Press
google.com/hostednews/ap/article/ALeqM5hPHFMSZDHZNqzg3uDQ1tvmGdoq4wD9G8FSG00
Los Angeles times
latimesblogs.latimes.com/money_co/2010/06/treasury-bonds-yields-rally-economy-auction-austerity-pimco-gross.html
Marketwatch.com
marketwatch.com/story/the-housing-market-recession-is-not-over-2010-06-09?pagenumber=1
