(PRWEB) September 19, 2012
Mortgage Hands, a Dallas mortgage company operating in several cities in Texas, is experiencing a low mortgage application rate even though mortgage interest rate is at a low level. “We expected the mortgage application rate to get higher as the interest rate gets lower, however, it seems like potential home buyers don’t think that way,” said one specialist from Mortgage Hands. “Our business is suffering because not very many people actually call and ask for mortgage brokerage services. The strange thing, however, is that we are seeing more and more traffic to our website. A good traffic to the website, in our opinion, means that many people are interested in getting a home loan, but something is holding them off from doing so, at least for the time being.” Mortgage Hands is not the only mortgage company that is running hard these days.
The latest report from Mortgage Bankers Association (MBA) on Wednesday said that US home mortgage applications dropped for the week of September 6. The number of the application has fallen 2.5 percent. Many experts once forecasted that the record low rates will lead to a housing recovery, but the latest news indicates that the low rates are not spurring housing sales.
According to the data from Freddie Mac, the average 30-year fixed mortgage rate has reached 3.55% for the week of September 6. And the 15-year fixed mortgage rates fell to 2.86%. The rates for the week ending September 6 are as follows:
30-year fixed mortgage rates for the week of September 6 averaged 3.55%, down from average of 3.66% last week. Earlier this year, the fixed rate was 3.91%.
15-year fixed mortgage rates dropped to 2.86% on September 6, down from last week’s average of 2.89% and much lower than the rate of 3.19 earlier this year.
5-year adjustable mortgage rates averaged 2.75% on September 6. That’s down from last week’s average of 2.78%. The rate earlier this year was 2.86%.
1-year adjustable mortgage rates averaged 2.61% for the week of September 6, down two basis points from 2.63% the week of Aug 30th and also lower than the rate of 2.80 earlier this year.
Mortgage rates are remaining low because the government wants to stimulate the housing market and speed the economic recovery. Unfortunately, the “stimulate” is only a ripple. Low mortgage rates are appealing some homebuyers into the housing market, but it seems that the recovery is painfully slow.
Even though the macro environment is not showing any good signs of the housing market potentially recover yet, Mortgage Hands professionals are optimistic. “People need a place to live in. For most people, a mortgage is what they need to get in a house. Our explanation for the mortgage application drop is that people are still in the mindset of the last housing market crash and remember all the foreclosures. We are on the same line with them on this - we also believe that caution is necessary. That’s exactly why a careful examination on a borrower’s finance situation is extremely important”, said the Mortgage Hands specialist. “It is not just the government that has the responsibility to rebuild home buyers’ confidence, but also us, professionals in the mortgage industry. We believe that the market will recover, albeit slowly,” he said.