Obama “Refinancings have significantly increased. Interest rates have never been lower”
Posted on | March 22, 2009 | No Comments
In his 60 minutes interview Preside Obama made the statement “”Well, we’re already starting to see flickers of hope out there. Refinancings have significantly increased. Interest rates have never been lower. That promises the possibility at least of the housing market bottoming out and stabilizing. It’s not going to happen equally in every part of the country.” The problem I have with this statement is that two minutes earlier Obama said this, “”I don’t think that we anticipated how steep the decline would be, particularly in employment. I mean if you look at just, you know, hundreds of thousands – now millions – of jobs being shed over the course of two months or three months, that slope is a lot steeper than anything that we’ve said we’ve seen before.”
So you understand how bad unemployment is but you think that low mortgage rates are going to put a bottom in the housing market? President Obama, do you realize that if people do not have jobs, they cannot buy homes? One would think you could put two and tow together, but I guess not. I realize that it is not a direct correlation but there is a relationship. Mortgage rates could be zero and it would not matter if the unemployment rate does not decline.
Yes, mortgage rates being low are a good thing for those who want to refinance, but that will not put a bottom in the housing market. The months of housing supply is at the highest levels in history and is likely to rise if the unemployment rate continues to rise. As stated earlier, even if mortgage rates were zero, this would not help to reduce the housing supply; more jobs and a lower unemployment rate will put a bottom in the housing market.
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