Despite the improvement in the US housing sector, mortgage rates are still near record lows, with 30-year fixed mortgages averaging 3.71 percent in the past week, according to Freddie Mac’s weekly survey.
According to an article in Smart Money, the mortgage situation seems to defy normal supply and demand rules, with the demand for homes now rising.
To explain the anomaly, a Market Watch report highlighted a few things that determine rates, such as the US and global economic situation as well as policy decisions by the US Federal Reserve.
Mortgage consultant Ron Chicaferro said that the low mortgage rates are beneficial to the housing sector since it helps prospective buyers who are unsure about making a purchase to acquire a home.
“The desire is there…but the fear prevents the move,” he noted.
Meanwhile, Alex Villacorta, Director of Research and Analytics at Clear Capital, a data provider for property valuation, observed that while home prices have stopped their downward spiral, they failed to rise as quickly as predicted by historical standards.
“National home prices are up, and that’s the first time that’s happened in some time. This is a necessary first step to this recovery,” added Villacorta.
Related Stories:
More discounts likely for Beijing’s mortgage takers
30% drop in UK mortgage borrowing
Aussie banks slash mortgage rates