Interest rates on 30-year, 15-year, and 5-year mortgages hit all-time lows, which has done nothing to simulate the real estate market. There is no end in sight to the buyer’s strike. Pending sales of existing homes fell 30% in May, it was announced today.
The report, titled “All Rates But 1-Year ARM Hit Record Lows In Freddie Mac Weekly Survey” included a comment from Frank Nothaft, Freddie Mac vice president and chief economist. “Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit,Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent occurred during the week of March 25, 2004.”High employment and tight standards for granting mortgages have kept many buyers out of the market. Just as important, foreclosures and high inventories of unsold homes have continued to push prices down. Many home shoppers believe that they could buy a home and watch its value fall further.
Douglas A. McIntyre
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