Years ago - many years ago - say, back in the early 1990's, Real Estate Prognosticators predicted a surge in homebuying interest if only mortgage rates fell. They did, and the market climbed!
The broken threshold they were hoping for - 10% - came in 1991, when interest rates for a 30-Year Fixed Rate Home Loan fell to only 9.9%. At that time, 18 years ago, many potential homebuyers reached for their check books (they still used "Check Books" back then), grabbed the Sunday Paper (folks still read Sunday Papers back then - there was scarcely an Internet), and hit the bricks, happily, looking for a New Home Bargain.
Fast forward to 2009! Unemployment is the highest it has been across the U.S. since 1983. Foreclosures and distressed property sales are skyrocketing. Home Values are still falling. And even ultra-low Mortgage Interest Rates can't quickly turn the market around!
Despite the fact that interest rates for the week ending the first week in November, interest in mortgage loans for buying a home dwindled. According to the Mortgage Bankers Association, applications that week for new loans fell a seasonally-adjusted 11.7% from the prior week. That's the lowest level since December, 2000. (See Mary Ellen Podmolik's Chicago Tribune story for more details).
There was a bit of good news for lenders, however, Refinance loans - those looking for a better rate on their current home - increased 11.3% during the same week. The MBA identified 71.5% of loan applications that week as re-fi loans, versus 66.1% the last week in October.
Currently, Mortgage Interest Rates for Fixed-Rate Loans range between 4.90 and 4.97% for the best qualified borrowers. For those without perfect credit and strong down payments or home equity, rates and loan fees are higher.
See our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO