EL SEGUNDO, CA (PRWEB) March 27, 2013
The mortgage bubble and its resultant burst lead to one of the worst financial crises in U.S. history, leaving almost no one unaffected. Business Insider reported in 2011 that new home sales in the U.S. were down 80% from their pre-crisis peak in July 2005.
Even so, personal finance expert contributor to GoBankingRates.com, Paul Sisolak, explains that there is an upside to the mortgage bubble burst that extends beyond today's low mortgage loan rates in a new GoBankingRates report.
The study reviews historical mortgage rates, analyzing how they have changed from just before the housing bubble burst to present day, as well as how the mortgage crisis impacts consumers today.
The good news is mortgage rates have been rising, a sign that effects of the post-2008 recession are healing. Last week, Nin-Hai Tseng of Fortune reported that the 30-year fixed mortgage rate reached its highest level in six months; at an average rate of 3.63%, it’s a sign that rates could get higher — not so high that they become cost-prohibitive, but enough to stimulate the market.
Sisolak advises, "Much like how we’ll never see gas prices dip below the $2 mark ever again, mortgage rates today seem to be holding steady, with only slight increases as an indicator that the housing market is experiencing an upswing. Low rates are the new high rates."
He adds, "Mortgage rates haven’t changed much since the housing bubble burst, but the experience has changed us. It’s shaped us to become more financially responsible, to be more aware in avoiding another housing crisis from happening."
The period following the housing bubble burst has been marked by a new and frustrating mortgage industry. Borrowers have access to the lowest mortgage rates in history, yet more stringent, cautious lending practices have made obtaining a home loan more difficult than ever before.
However, in hindsight, there is some good to come out of the bubble burst. For one, it helps consumers better understand the home loan process and how mortgage interest rates operate. More importantly, though, having experienced the mortgage crisis aids in preventing another housing bubble from happening again.
For questions about this report or to schedule an interview with a GoBankingRates editor, please use the contact information below.
GoBankingRates.com is a national website dedicated to connecting readers with the best interest rates on financial services nationwide, as well as informative personal finance content, news and tools. Go Banking Rates collects interest rate information from more than 4,000 U.S. banks and credit unions, making it the only online rates aggregator with the ability to provide the most comprehensive and authentic local interest rate information.
Jaime Catmull, Director of Public Relations
Business Insider, 27 Depressing Facts About The Housing Crash, March 21, 2011.
Fortune, Why higher mortgage rates will help the housing market, March 18, 2013.