The slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand.
(PRWEB) June 23, 2012
As predicted in last week’s Homes.org mortgage report, rates fell slightly again this week to new record lows, but they may fall further still. In this week’s report Homes.org discusses the factors that led to the latest mortgage interest rates as well as this week’s economic events that could have an effect on rates in the coming days. This week the 30-year fixed rate mortgage slipped 2 basis points while the 15-year fixed rate dropped 1 basis point.
Current mortgage interest rates are:
3.89% - average rate for a 30-year fixed rate mortgage
3.16% - average rate for a 15-year fixed rate mortgage
The downward trend that began at the beginning of May continues on with no sign of stopping after the Federal Open Market Committee decided to keep the benchmark rate at almost zero. For those following interest rates it came as no surprise given the weak job growth and consumer spending. Though a number of real estate markets are doing better this year compared to last, things still haven’t picked up as high as hoped.
The continued economic turmoil in Europe is also suppressing mortgages here in the U.S. due to the appeal of investing in U.S. Treasuries. The bright side of the stifled global economies is that buyers and home owners can get the best rates on record.
This week there were numerous economic reports released. Below is an overview of this week's most important economic activity.
- Tuesday: May Housing Starts
- Wednesday: Fed Two Day Meeting and Press Conference
- Thursday: May Existing Home Sales
The most significant of the three events mentioned above is the release of the May Existing Sales report, which found that sales dropped 1.5% last month. However the decrease is being attributed to the lack of inventory rather than lack of buyer interest. NAR chief economist Lawrence Yun explained, “the slight pullback in monthly home sales is more likely due to supply constraints rather than softening demand”. “Even with the monthly decline, home sales have moved markedly higher with 11 consecutive months of gains over the same month a year earlier.”
Homes.org is predicting there will be a slight decline in mortgage interest rates again next week given that the economic situation in Europe and the U.S. remains largely unchanged.
Homes.org is a fast growing real estate search portal that offers users much more than MLS listings. Homes.org gives users access to a rich collection of resources, including but not limited to, real estate listings, home owner finance tools and home service tools. Homes.org brings buyers, sellers and renters important information about the current markets and intelligent tools by partnering with real estate professionals from around the country. Homes.org is a subsidiary of Star Nine Ventures, Inc. headquartered in Austin, TX.
About Star Nine Ventures®
Star Nine Ventures® is an Austin-based, marketing-driven venture creation company targeting a wide range of national business-to-consumer online marketplaces. Star Nine's core mission is to build businesses that provide exemplary consumer experiences and unparalleled customer service.