Home buyers are scoring mortgage rates that are around the rates their parents or even grandparents may have locked in. Those with job security, good credit scores and cash on hand will be able to take advantage of some of the lowest mortgage rates since the 1950s. The average rate for a 30-year fixed mortgage dropped to 4.69 percent this week, according to the Associated Press. Previously, the low was set in December at 4.75 percent.
The impact that these lower rates will have on the economy isn’t expected to be much. “As long as prospective buyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better,” Greg McBride, senior financial analyst, told the AP.
This news may seem positive, but it’s also got a negative side. Low interest rates aren’t doing much to help Americans who are trying to save money. They’re earning very little with money being held in savings accounts. These low rates won’t even boost refinancing activity, according to experts. Most people that are eligible have already done it said Michael Fratantoni, according to the Associated Press. “Rates haven’t dropped low enough to justify a second refinancing,” Fratantoni said. “The group of people who could potentially benefit is much smaller than it was 15 months ago,” he said.
Many of those who may want to refinance, can’t because they owe more on their homes than what they’re worth. New government programs are trying to change that but fewer than 300,000 homeowners have participated, which is a small portion of the 15 million Americans who are underwater on their mortgages. “It’s not the desire to refinance. It’s the ability to refinance,” Chris Brown, a loan officer with Trinity Mortgage Co. in Orlando, Fla, told the AP.
Tags: Real estate, personal finance, Mortgage, interest rates, Refinancing
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