The average rate for a 30-year, fixed rate loan fell again according to Freddie Mac's weekly survey. The rate decreased from 4.2% last week to 4.14% this week, while the 15-year rate decreased from 3.29% to 3.25%. This is the lowest average rate we've seen since October of last year.
There are several reasons as to why these low rates aren't doing much for the housing market. According to Mortgage Bankers Association, applications for mortgages have dropped about 10% from a year ago. Meanwhile home sales have taken a hit due to inventory shortages and lending standards continue to remain strict.
On the positive side, the number of permits to build new houses and the number of new homes being built rose higher than expected in April. Also, low mortgage rates have allowed more homeowners to refinance their homes on more affordable terms.
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