Categorized | Residential

Demand in Housing Market Remains Low Despite Record Mortgage Rates

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As mortgage rates continue to fall and reach record lows week after week, the overall demand in the housing market continues to slump. The overall lack of interest on behalf of potential homebuyers is certainly alarming to lenders and real estate agents. Mortgage rates for thirty-year, and fifteen-year fixed-loans have never been lower. However, economic uncertainty and severely limited confidence in the real estate market has led to very little growth in potential buyers taking advantage of such low rates.

In fact, mortgage applications are down as much as seven percent from last year, when the rates were significantly higher. With a massive supply of homes on the market, it is very likely that many buyers believe that home values will continue to decline in price. Because the current rates are expected to remain at their current levels, or may even decline further, many homebuyers are not feeling rushed to take advantage of them.

Refinancing applications are also down from last year despite the current low rates. Unlike the decline in new mortgage loans, however, the decline in refinancing applications is likely due to current restrictions that make it impossible for those with underwater mortgages to be approved for refinancing. Refinancing numbers may see sharp increases if the restrictions are modified or removed.

Certain states did see a fairly strong increase in new mortgage loan applications. Michigan, Vermont, and Ohio all had greater than twenty-five percent increases in the number of new mortgage loan applications.

Fifteen-year fixed-rate refinancing applications also increased substantially, jumping nearly thirty percent since the last survey.

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About Josh Johnson

Josh is the main writer for the Residential category. He also helps out on other categories when needed, mainly the International section.

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