Mortgage Rates Rise Slightly and Housing Market Sees No Improvement
Nov 29th, 2010 @ 6:20 PM by Debbie Dragon
Just two weeks ago, mortgage rates were at their lowest since the housing crisis began. For a 30-year fixed mortgage, rates bottomed out at 4.17%. Rates are creeping up ever so slightly and Freddie Mac is reporting current 30-year fixed rates to be at 4.4%.
15-year rates are also up slightly, coming in this week at 3.77%. Last week, these rates were at 3.76%; two weeks ago, 15-year rates hit rock bottom at 3.57%.
Even though rates are up slightly, they are still historically low and the housing market has declined once again. Home purchases were down again for the month of October.
According to the Commerce Department new home sales fell in the month of October by 8.1%. This is just a slight improvement over new home sales this past August when they hit the lowest rate seen since 1963.
Sales of previously-owned homes did not fare much better according to a report released by the National Association of Realtors. In October sales of existing homes also dropped down an additional 2.2% from September.
In the midst of all of this, homes in some cities did see a slight improvement in value. Compared to a year ago, homes in half of the 20 largest cities across the country saw slight rises in home values in October. Many people however, think the rise may be short lived. In a survey conducted by Fannie Mae entitled the Fannie Mae National Housing Survey, Americans revealed that they are not optimistic.
Americans were polled during July through September of this year and only 68% surveyed thought that now was a good time to make a home purchase. That number is down 2% from June.
“Consumer attitudes toward buying a home are more negative since last quarter,” said Doug Duncan, Vice President and Chief Economist, Fannie Mae. “Our survey shows that Americans’ declining optimism about housing and their personal finances is reinforcing increasingly realistic attitudes toward owning and renting.”
As we approach 2011 no one really knows where the housing market is going. If optimism continues to decrease and more Americans continue to choose to rent instead of to buy, it could be a long time before we actually do see the market hit rock bottom.
Debbie Dragon is a full time freelance writer and the co-owner of ReliableWriters.com.