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The Denver Post reported last week that mortgage rates have fallen to their lowest point in 50 years. Doesn’t that mean they have fallen to well below pre-recession rates? The last time mortgage rates were this low was in the 1950s. But experts say that the falling mortgage rates will not improve the housing market much — too many people have either lost their jobs or are afraid that they will lose their jobs — so they are afraid to commit to a mortgage.
Well, what do the experts know, anyway? In March John Koskinen, the interim chief executive for Freddie Mac, was quoted in the Post saying that mortgage rates were about to bottom out — he said they had gone as low as they were going to get, and people should buy houses while they could get those rates. Well, he was wrong — mortgage rates dropped even further, to the rates they are at today.
But that isn’t the end of the pessimism we saw in last week’s Post. Yesterday an article picked up from the Associated Press argued that even though the number of unemployment applications is beginning to drop, and even though first time applications for unemployment benefits are at their lowest level since early May, we shouldn’t get too excited — it’s probably not a trend.
Maybe, but what if it is a trend? What that says to me is that the people who aren’t buying new homes now because they don’t have jobs may feel differently in another year or so, when they have gotten back to work and have another year of job history under their belts.
Why do we assume that things are going to get worse and not better? In Denver, of all places — where did our confidence go? What ever happened to that old American tradition called hope?
Tags: economy, housing market, job trends, mortgage rates, pre-recession, recession, unemployment