According to Freddie Mac, mortgage rates in the United States have stayed either at or near record lows over the past week. Furthermore, the interest rate on 30-year fixed rate home mortgage loans is one half percentage point lower than where it was a year ago. Therefore, despite the volatile bond market that we are currently facing, home loan rates are still managing to keep affordability high. Nonetheless, the demand for home loans is not quite at the level experts would like to see.

According to the Freddie Mac report, the demand for home loans has fallen so far that they reached a 13-year low in May. This is particularly disappointing when considering that the demand had spiked during the weeks beforehand. Of course, this spike in demand can largely be attributed to the fact that many buyers were racing to get their contracts signed before the homebuyer tax credit expired on April 30. Now that the tax credit is expired, the industry is experiencing a bit of a lull.

Although demand for home loans has taken a severe dip, many within the industry are still optimistic about the future. In fact, many see the dip as only temporary, as many of those who would have typically purchased a home later in the spring were likely drawn into making an earlier purchase as they took advantage of the homebuyer tax credit.

While the future of the housing market remains uncertain, the fact that borrowing costs have remained low and home prices are still down means that many are predicting a gradual recovery over the second half of the year. The fact is that fixed 30-year mortgage rates averaged just 4.79% during the week that ended on June 3, which means they were up by only 0.01 percentage point when compared to the previous week. Furthermore, this rate represents one half point lower than the 5.29 percentage rate that was experienced at the same time last year. In addition, when compared to the 4.71% rate that was enjoyed last December, the more recent rate represents on a very small increase. Similarly, the 15-year home loan rate experienced a record low at this time, reaching just 4.20%. This represents a 0.01% decrease when compared to the previous week and is a significant drop when compared to the 4.79% interest rate that was in place just a year ago. Mortgage rates are expected to stay in this range as the economy continues to struggle.

Author Bio: Ryan Lynch works for a real estate team that helps buyers and sellers with Austin real estate and relocation. His team specializes in the Steiner Ranch Community including lakeside cialis cheap properties and golf course homes.

Category: Finance/Mortgage
Keywords: mortgage, interest rates, home loans, mortgages