Mortgage rates forecasters saw the increase in interest rates for 2015 as a sign that home loan rates will also rise. However, the opposite hasd happened because the average on a 30-year fixed loan was at its lowest level this year and it could still go down into new record territory.
The combination of economic and political factors are the reason why mortgage rates have fallen. The European and Fed Central Bank are reported to have expressed their concern over the global economy trajectory. Investors and consumers alike are on edge because of the following factors, which include stock correction, oil prices are unpredictable, and the highly erratic presidential race.
Lower mortgage rates incited a mortgage refinances reboot last week. However, that did nothing for the homebuyers. Mortgage loan company Fannie Mae, which has just recorded its worst monthly Home Purchase Sentiment Index (HPSI) in 18 months, thinks that buyers and sellers alike believe that now is a bad time in making deals, according to a feature by CNBC.
Fannie Mae Senior Vice President and Chief Economist Doug Duncan reportedly stated that "Growing pessimism over the last three months about the direction of the economy seems to be spilling over into home purchase sentiment."
"The gap between the share of consumers who think the economy is on the wrong track and the share who think it is on the right track has widened, nearly matching its reading last August, when concerns regarding China and oil prices led to the biggest stock market plunge in years. In turn, we saw dips this month in income growth perceptions, attitudes about the home selling climate, and job confidence," he added.
The Mortgage Bankers Association has revealed that the mortgage credit availability tightened in March despite the low mortgage rates, which was mostly due to conventional loans. Government programs like the Federal Housing Association and VA loans, on the other hand, relaxed slightly, according to a feature by the Washington Post.
