Categorized | Finance and Mortgage

Mortgage Rates in the United States Hit New Record Low

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Mortgage rates in the United States continue to drop to new all-time lows. Rates fell to just 4.01% for a thirty-year fixed loan. Fifteen-year fixed mortgage loans dropped to a staggering 3.28%.

The mortgage rates are expected to fall even further, as the Federal Reserve has made it clear that they intend to significantly reduce borrowing costs. The hope of the Federal Reserve is that lower borrowing costs will spur more people to buy homes and revitalize the residential real estate market in the United States.

With the loans at their lowest rates ever, many people are opting to refinance their current mortgages in order to lower their monthly payments. However, not all homeowners are able to refinance despite having mortgages with significantly higher interest rates. Those with underwater mortgages have been prevented from taking advantage of the low interest rates due to various restrictions involved in the refinancing process.

While the Federal Reserve hopes that the record-low interest rates will drive more people to buy homes, it has not yet happened thus far. In fact, the number of previously owned homes purchased in the last month has declined more than one percent.

Potential homebuyers are either choosing not to buy for various reasons, or have simply cannot buy due to being denied mortgage credit. Lending standards are incredibly tight, and only those able to pay a significant down payment have been able to secure mortgage loans at the current rates.

Furthermore, many potential homeowners have opted not to buy a home in the current market due to overall uncertainty surrounding the economy and job market.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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