Mortgage rates in the US set a new record-low, reducing the costs of borrowing for homebuyers as demand slumps.
The 30-year average rate of fixed mortgages dropped to 4.32 percent in the week ended yesterday from 4.36 percent last week, according to a statement released by Freddie Mac. Meanwhile, 15-year fixed-rate mortgages hit 3.83 percent.
The low mortgage rates in the US have yet to boost home sales, worsened by the jobless rate and the expiration of federal homebuyer tax credit. According to a report from the National Association of Realtors and Commerce Department, sales of new and second-hand homes dropped to the lowest level in July.
“These mortgage rates are eventually going to catch the consumers’ attention,” said George Mokrzan, senior economist from Huntington National Bank in Columbus. “Consumers have just been scared about a lot of bad news about the labor markets.”
The number of transactions to purchases second-hand homes unexpectedly increased in July, a sign that the market is starting to stabilise. Data from the National Association of Realtors indicated that the index on pending resale home transactions increased 5.2 percent following a 2.8 percent drop in the previous month.