And now it has occurred to me that the promise of low
canada goose How Record Low Mortgage Rates Could Actually Hurt Home Sales Colin Robertson, The Truth About Mortgage Oct. 12, 2011, 9:09 AM <a href="http://www.flickr.com/photos/karlfrankowski/1024044900/">karl frankowski on Flickr</a> Last week, I argued that the super low mortgage rates could actually be contributing to strategic defaults. The general idea being that the low rates today make it even less desirable to hold a “high-rate” mortgage from the past. The only positive from this assumption is that homeowners in this position may buy a new home and bail on the old one. That’s a positive for them canadagooseoutlets.biz , minus the credit score hit, but a negative for the housing market and mortgage lenders (another foreclosure, more overpriced inventory). And now it has occurred to me that the promise of low mortgage rates for the foreseeable future may have the unintended consequence of hurting home sales, at least in the near term. Only 33% of Americans See Mortgage Rates Rising You see, a new poll from mortgage financier Fannie Mae revealed that just 33 percent of consumers expect mortgage rates to rise in the next 12 months. That figure is down from 45 percent a month ago, and is the lowest number Fannie has recorded since their monthly tracking began. At first glance, it sounds like great news. Mortgage rates are going to stay at or near their record lows. Low mortgage payments for everyone who decides to dive in! But wait, why isn’t anyone buying a home? Well, if mortgage rates aren’t going anywhere fast, why not simply take a “wait-and-see” approach. Kick back, see how the economic uncertainty plays out, watch for home price declines Canada Goose Vests , and buy next year. You see, Americans also expect home prices to decline further. On average, they see a 1.1 percent decline over the next 12 months, which is the highest expected decline to date in the survey. And only 18 percent believe home pries will increase over the next year, the lowest number reported to date. So it’s a bit of a dilemma. If home prices are expected to keep slipping, and mortgage rates are forecast to hold steady, why buy now if you don’t have to? (Home prices vs. mortgage rates) Might as well just rent a little bit longer (or hang out in your parents’ basement) before pulling the trigger, especially since a lot of homeowners are pricing their homes higher as a result of the insanely low mortgage rates. Of course, it’s still a relatively attractive time to buy as a first-time homebuyer. And trying to time the bottom is a pretty trick endeavor. But with the traditionally slower portion of the home buying season ahead of us, holding out may lead to a discount over today’s prices. This post originally appeared on The Truth About Mortgage blog. Read the original article on The Truth About Mortgage. Copyright 2018. canada goose parka
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