Mortgage rates are still at record lows. But, what does this mean for all of us? Yes you can get a home or refinance your current mortgage at a phenomenal interest rate, but there is more to it. Why are interest rates so low right now?
Interest rates continue to fall because there are not enough people buying homes. With a lot of the “Bank Owned” inventory hitting the market, there just are not enough qualified buyers. There are not enough buyers because lending practices have become increasingly strict. I agree that the practices during the sub-prime mortgage boom were a major cause of the housing bust, but that doesn’t mean that all of the requirements were too lenient.
Yes, there needs to be good regulation in lending, but there are too many people, wanting to purchase homes, and in the past, would have been qualified to, that cannot. If our government really wants to get rid of all the inventory on the market and pull us out of this recession, homes have to be sold. For homes to get sold, there has to be qualified buyers, and with the lending standards the way they are right now, not many people, who do not already own one or two houses, can qualify.
Leave a comment and let me know what you think.
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