The signs of an economic recovery are nowhere to be found, but that’s good news for those looking to buy a new house or refi your home through the HARP Loan program. Confidence in the economy is slipping, economic growth has slowed, and concern over the health of the economy is rising. This news is bad for those looking for stability in the housing market, but very good for those in the market for a new home.
According to Freddie Mac, the 30-year mortgage rate fell to 3.84% last week, lower than the previous all time record low of 3.87% established on February 9 of this year. The average rate was up around 4.71% this time last year. The 15-year fixed average also fell to 3.11%, also a new record low.
The economy is failing to meet already low expectations, lower than anticipated growth led to disappointing GDP figures released last week and consumer confidence has fallen again. The Mortgage Bankers Association’s Market Composite Index, an indicator of mortgage application volume, remained steady last week after falling 3.8% the week before. Reports of low inflation have kept the yields on treasury bonds low; resulting in mortgage rates to fall to record lows.
Another piece of economic news set to be released this Friday, the April jobless report, will also have an affect on the housing market. The report could come as good news, like in March when reports indicated unemployment rates were lower in 342 of 372 major metropolitan areas across the country. But this could also come as bad news; March’s report indicated 13 metropolitan areas subject to unemployment rates over 15%, a statistic sure to keep buyer confidence subdued.
As the economy continues to move in a circle, the health of the housing market seems to be in decline. Consumer confidence seems to be the driving force of the market as prospective buyers continue to sit on the sidelines despite all time record low mortgage rates.
To take advantage of the decreasing mortgage rates, those with an FHA loan would benefit too. Homeowners with an FHA loan could take advantage of the FHA Streamline Refinance program.