Categorized | Finance and Mortgage

Rates for United States Mortgage Loans Increase

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After a period of repeated decreases, U.S. mortgage loans have finally increased from their record-low levels. The average mortgage rate for a thirty-year fixed loan increased to just over four percent after hovering below four percent for the last two weeks.

The increase comes as a result of the good news on the economic front. Recent reports indicate that the economy may be faring better than expected, and that the European debt crisis appears to be under control.

The previous fixed loan mortgage rate was the lowest it has been in history for both fifteen-year and thirty-year loans. Even with the historically low rates, the housing market in the United States has continued to struggle. Banks tightened credit in conjunction with the low rates, making the process of obtaining a mortgage loan very difficult for the average homebuyer. Foreclosures are once again starting to increase, as the number of default notices sent out jumped over ten percent in the last quarter.

There are a number of potential homebuyers on the market, indicating that the demand for buying homes still exists. The number of mortgage loan applications has increased in recent weeks. However, many of these applications have gone unapproved due to the tightened lending restrictions.

There is no clear indication as to whether or not lending restrictions will ease up following the increase in the mortgage loan rate. Real estate analysts are hopeful that the increases in the loan rate, as well as new policies passed at the governmental level will positive impact the housing market. However, there has been no clear indication of that happening.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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