Existing home sales for April jumped 7.6 percent. The median home price followed, growing by 4 percent; at the same time, growing concern about Europe’s ability to handle debt have sent investors into the safety of U.S. government bonds, which have driving mortgage rates to the ultra lows seen today.
Do Low Mortgage Rates Signal 'Buy?'
Does the continuing mortgage rate dip mean that now is the time to buy? According to many analysts, the answer is no. A fragile economy lingers – jobless rates continue to wreak havoc on the hearts and minds of Americans who are leery of constant promises of economic recovery. Moreover, consumer confidence, frankly isn’t so confident.
Patrick Newport, an economist at IHS Global Insight, has this to say bout the matter: “Having a good mortgage rate helps affordability, but we’ve had low mortgage rates for a long time now and sales have stayed below 5 million, except when the tax credit was involved.”
Meanwhile, Americans are pulling back from the home buying spree, and a growing inventory of homes is popping up on the charts. Some also point to the number of foreclosures, or so-called “shadow inventory” of foreclosures which have failed to hit the market due to underwater homeowners who have continued to struggle to make payments, but can no longer do so.
The national median existing home price was $173,000 in April. Foreclosures accounted for 33 percent of April’s sales. Moreover, the total inventory of homes in April rose by 11.5 percent to 4.04 million. This represents an upward trend in the supply of homes, leaving some analysts concerned about the future of the market. It appears the real estate sector isn’t in the clear yet.
Today's Mortgage Rates at A Glance
Zillow’s mortgage rates are for Tuesday are mixed. The 30-year fixed-rate mortgae is currently at 4.61 percent, down from Mondays’ 4.63 percent. The 15-year fixed-rate home loan is actually on the upswing, at 4.16 percent, in contrast to 4.12 percent Monday. The 5-year adjustable-rate mortgages is following suit is up a percentile to 3.50 percent.
Bankrate.com’s 30-year average is at 4.87 percent down from last week’s 4.94 percent. The 15-year fixed-rate mortgage is also down to 4.20 percent from 4.24 percent. The 5-year ARM, however, is up to 3.69 percent from 3.65 percent.
Written by Lani Shadduck