Good economic numbers from the US Economy has economists and analysts upbeat about the future. But recovery is still a term only a few use to describe the economy’s present state.After registering better than expected numbers in the housing sector economist believe that the worst of the recession is over.
After posting record lows earlier this year mortgage rates continue to hover at 5% APY. This month has seen 30 Yr Fixed rate mortgages well above 5% for a short while. Rates have been steadily inching since June and this months numbers show mortgage rates steadying at low 5% APY levels.
Good news – Bad News
Housing reports show an increase of new home sales and increasing confidence in the real estate industry today. But not all sectors in the housing industry have shown resilience. Huge drops in construction of multi-housing units such as condos and apartments continue to plague the industry nationwide.
Federal and private banking programs have been initiated to address homeowner concerns. Numerous offers such as an $8000 tax credit for new homeowners were introduced to spur new home sales. Foreclosures remain high, however, as more and more Americans find paying their monthly mortgages even harder. Only a tenth of homeowners who are in danger of foreclosure is undergoing refinancing under the said plan. Government and private sector efforts to forestall their ever growing numbers are best described as snail pace.
The Federal Reserve’s move to purchase 1.25 trillion of mortgage backed securities has helped boost sales of new homes. It has helped Fannie Mae and Freddie Mac the two biggest holders of mortgages to move their mortgage rates lower. One of the Fed’s moves to stimulate the housing sector was to purchase mortgage back securities but the funds are drying up and the program is scheduled to end later this year.
Buying a new home
Recent trends in the market today indicate that the days of low-mortgage rates maybe coming to an end. We have seen mortgage rates at record lows earlier this year. The fact remains that mortgage rates move higher faster than they drop in value. Rates continue to remain at 5% APY ranges they are still a far cry from last year’s rates. With home market values dropping by as much as 20%, more homes are selling at bargain prices. Current mortgage rates will not last forever. Today’s window of opportunity for buying homes at rock-bottom coupled with low mortgage rates maybe coming to an end. The chance of getting a low monthly mortgage payment may not present itself for long. The best decision does not only require you to get the best rates but making right decisions at the right time.
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