Home mortgage rate lowest in 50 years
Mortgage rates are the lowest they have been for over 50 years but housing sales have not increased. With rates at 4.49pt for a 30 year fixed mortgage buyers are still not closing deals.
Banks and other mortgage lenders have yet to ease their grip on credit and with record numbers of unemployment that is unlikely to change any time soon. Sales were taking place when the government ran its homebuyer's tax credit, but that ended in April and sales have been stalled since.
It's not just houses that are not selling; consumer spending has been reduced in all areas and the recession is grinding its way along without any respite in sight. At the same time, new car sales are increasing and many manufacturers are seeing profits this quarter for the first time since the bail out.
It's hard to know what's going on…are people using their mortgage payments to buy new cars and walking away from their homes? This seems likely and will only add to the housing glut.
Something has got to give for change to come.