U.S. Mortgage Rates Low as Double Dip Fears Arise
Mortgage rates have dropped for a 3rd consecutive week as inflation and double dip fears affect the housing market. Already 5 years have passed since the housing peak in 2006, and yet housing is still in trouble. In fact, Yale economist and founder of the Case-Schiller Index noted recently that there was a “substantial risk” of home prices dropping another 15-25%. That doesn’t sound all that positive for real estate purchases this year.
Home Affordability Grows
On the flip side, if you’ve been saving diligently and didn’t buy into the bubble, homes have never been more affordable. And importantly, home loan rates have not been this low in recent memory. Much has changed since the housing crash. Even the option ARM has made a comeback thanks to stricter lending standards that will not allow interest rates to skyrocket month over month. Still, many experts are saying it may not be the best time to buy a new home.
A double dip in housing is a very real threat thanks to sustained unemployment rates at the 9% level and growing foreclosure rates. It’s definitely a gamble for you to buy in this environment, but no one knows for sure whether this really is a bottom for housing with several smaller dips before it ultimately recovers. For now, affordability is still very much a personal decision and local area mortgage rates still come into play. In fact, many of the countries top areas have already seen such drastic reductions that it’s hard to imagine prices dropping any further.