Freddie Mac: Record Low Mortgage Rates Haven't Resuced Housing
"While we had forecast lower prices [for 2011], we did hold out some hope that at the very least transactions would pick up slightly from 2010 levels," said the report from a team led by analyst Oliver Chang.
"However," the report said, "it proved to be too optimistic a prediction. Not only did total home sales fail to rise, but also mortgage applications for purchase continued to fall -- indicating that not only is tight mortgage credit limiting demand, but even the desire to buy a home continued to wane."
The recent bottom in rates stems from anxiety over the European debt crisis, which has increased demand for U.S. Treasury securities. That has depressed the yield on Treasuries, which act as a benchmark for mortgages.
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