You know the real estate market is dangerously weak when fixed mortgage rates reach their lowest point in sixty years.
30-year fixed mortgages were at an average of 4.09% while 15-year fixed mortgages were at 3.3%. These values were respectively 4.37% and 3.82% last year.
The large drop in mortgage values are a side-effect of the debt troubles Europe is currently facing, since investors are shifting money into safe treasures and forcing yields down. It is, however, the weak buys and sales of real estate properties across America that cause
While these low mortgage values are a sign of an anemic real estate market, they can be very attractive for homeowners that want to purchase property or refinance their existing high-interest mortgages.
Mortgage applications have indeed risen by 6.3% after a few weeks in decline.
The problem here is that not many people are will or able to buy or refinance, as Paul Dales of Capital Economist explains:
“Even though 30-year rates have fallen to a record low, the 90% gain in mortgage applications for refinancing since April is modest compared with the surges in 2003 (720%), 2009 (560%) and 2010 (240%)”
High unemployment, low wage gains, large debt, strict regulations and weak equity make it nearly impossible for most Americans to take advantage of these record-low mortgage rates.