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Average Mortgage Rates Tumble to 5%, What It Means for You

Posted on | January 9, 2009 | 1 Comment

For the 10th straight week, mortgage rates on 30 year fixed loans fell.  Once again, historical lows were achieved as the benchmark rate dropped to an average of 5.01%.  This average is down from the 5.1% last week and the 5.87% a year ago; the 30 year fixed was at a high of 6.7% last summer.  What is unclear is if these rates are attractive enough to allure new homebuyers into the market.

While rates are at their lowest levels since Freddie Mac started collecting data in 1971, it is still uncertain if this is helping the housing market.  The attempt to lower rates by the federal government is obviously working, but the underlying desire of the Fed is to stimulate the housing market.  Housing data suggests that the overall housing market is getting better, but this may be a facade.  WIth some home buyers having several mortgage applications currently being analyzed, the total number of applications is a swayed statistic.

Ultimately, money needs to come back into the housing market.  If individual home buyers are refinancing to a lower rate, that money is not “stimulating” the struggling economy.  It is great for the home owner that wants to save money for the future, but is doing little for the economy now.  So, just know, that it is going to take time, possibly many years, before we see a true recovery in this housing market and overall economy.

Related Posts:

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Mortgage Rates Will Continue Lower, But…

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Comments

One Response to “Average Mortgage Rates Tumble to 5%, What It Means for You”

  1. Subprime Blogger » The Lazy Homeowner’s Way to Refinance
    February 13th, 2009 @ 11:17 pm

    [...] Average Mortgage Rates Tumble to 5%, What It Means for You [...]

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