Mortgage rates continue to fall and continue to break records! The average 30 year rate on a mortgage was 3.56% which is down from 3.62% last week and is the lowest rate ever since they started offering long term mortgages in the 1950’s. The 30 year mortgage rate has matched or beaten record levels for 11 of the last 12 weeks! The 15 year rate fell as well to 2.86% down from 2.89% the week before.
Although the mortgage rates are phenomenal, many buyers are having trouble coming up with a large enough down payment or are having trouble with the stringent lending requirements.
According to the Minneapolis Area Association of Realtors home sales in the Twin Cities during the first six months of 2012 area rose by 17.4 percent over the same period last year and climbed 13.8 percent in June. The trend is fueled by the low mortgage rates, low inventory and decline in foreclosures on the market. The median sale price for Twin Cities homes rose 10.7 percent last month, reaching $179,500. New home construction is also on an upswing with 45 percent more home starts than the first 6 months of last year.
Reducing the number of foreclosures is a big step toward recovery in the housing market. With fewer foreclosures and more-stable home prices, the number of homeowners who owe more than their house is worth has begun to recede slightly. CoreLogic reported that 19.2 percent, or 97,681, of all residential properties with a mortgage in the Twin Cities were in negative equity territory during the first quarter of the year, a slight decline from 21.7 percent during the previous quarter.
Although mortgage rates are at their lowest point in at least 40 years and the current 30 year rate is at about half of the historical average are loan rates boosting the home market? These low rates are helping to jump start the housing market but there a few problems that are still keeping the market from coming back in full force.
Overall the market is up and is continuing an upward trend but it will take time for everything to be back in balance.
Mortgage rates hold steady this past week according to Freddie Mac. 30-year, fixed-rate mortgages averaged 3.66% for the week ending June 27th, matching the previous week’s record low. Last year at this time,the rate averaged 4.51%. Freddie Mac Chief Economist Frank Nothaft said the virtually unchanged rates should help to support a recovering housing market.
The Federal Housing Finance Agency’s house price indexes showed more than a 0.5% monthly increase in April. Pending existing home sales rebounded in May by 5.9% to match a two-year high and new home sales jumped 7.6% to its fastest pace since April 2010.