Real Estate Market

Record-low mortgage interest rates alone won't end the housing crisis

(7/6/2012) - Ever-falling, record-low interest rates continue to tempt consumers to purchase a home or refinance, but with strict underwriting rules, weakened consumer confidence, and economic turmoil in an election year, they just aren't buying it.

Mortgage applications were down 7.1 percent from a week earlier, according to the Mortgage Bankers Association's (MBA) "Weekly Mortgage Applications Survey" for the week ending June. 22, 2012, the latest report.

Meanwhile mortgage interest rates hit records lows in five out of the past six weeks, according to Freddie Mac's Primary Mortgage Market Survey.

For the week ending July 6, Freddie Mac reported averages mortgage rates at record lows for both the 30-year fixed interest rate mortgage (FRM) and the 15-year FRM, at 3.62 percent and 2.89 percent respectively.

Nevertheless, MBA found both the refinance index and the purchase index down 8 percent and 1 percent, respectively, from the previous week and the purchase index was down almost 3 percent from a year ago.

"Refinance volume fell last week due largely to a fall-off in refinance applications for government loans, which had more than doubled the prior week," said Michael Fratantoni, MBA's vice president of research and economics.

"The large swings in activity were due to the implementation of FHA's new premiums on streamline refinances, and borrowers timing their applications to lower their premiums," Fratantoni added.

But that's not all.

Consumer confidence is on the rocks

The Conference Board's "Consumer Confidence Index" was down in June for the fourth consecutive month as consumers remained pessimistic about incomes, jobs and the economy.

Those expecting increases in income declined to 14.8 percent in June, from 15.7 percent may, according to the board. Consumers concerned about income, aren't willing to risk a mortgage.

Only 14.1 percent anticipate more jobs in the next six months, down from 15.4 percent. Those no-job-no-income or assets (NINJA) loans are long gone.

Consumers stating jobs are "hard to get" increased to 41.5 percent from 40.9 percent, while only 15.5 percent expect business conditions to improve over the next six months, down from 16.6 percent.

Among those surveyed, 35.1 percent said business conditions are "bad," up from 34.7 in May.

"Consumer Confidence declined in June, the fourth consecutive moderate decline. Consumers were somewhat more positive about current conditions, but slightly more pessimistic about the short-term outlook. If this trend continues, spending may be restrained in the short-term," said Lynn Franco, director of economic indicators at the board.

American Dream unrealized

In another recent study, real estate valuation company Integra Realty Resources (IRR) found that the American Dream of homeownership is alive and well, but dreams don't always translate into reality.

While 75 percent of non-homeowners ages 22 to 50 in 11 major U.S. markets believe owning a home is important, more than 60 percent don't plan on taking the plunge anytime soon.

Their reasons for not buying were lack of a down payment (31 percent); fear of making a bad investment (24 percent) and concern about the economy (21 percent).

That could be good news for the rental sector.

"The down payment conundrum continues to suppress demand with no easy resolution in sight. This segment of the population will be turning to rental housing instead, which will further boost the rebounding multifamily sector," said Benjamin Loughry managing partner at IRR-Dallas/Fort Worth.



Refinance at Today's Low Rates!


Follow the links to continue reading the related articles

FHA back pedals on credit dispute underwriting rule, perhaps only temporarily

Housing Statistics: Keeping Tabs on Housing Market Figures

Homeowner's short sale ebook just in time for FHFA streamlined short sales

Shadow Inventory Fades: Home Prices Poised for Growth

Foreclosures and Home Sales: A Bigger Piece of the Pie

Home prices, interest rates create perfect storm: Homes more affordable than ever

Wall Street didn't particularly 'like' Facebook's IPO, SF Bay Area home values will

Home sellers lower prices to compete, bidding wars ensue, recovery heats up










Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state

Get the Updated and Improved Mortgage Rates App from

iPad for Mortgage Rates

Real Estate Market News

Refinancing: Selecting a Loan

Moving Ahead With Your Refinance