The 15-year fixed rate mortgage reached its lowest level since December on Friday as several economic reports revealed some concerning data. The most notable was the continued drop in home prices throughout the United States. The average 15-year fixed mortgage for the week ended at 3.97%. 30-year fixed mortgages averaged 4.78% for the week according to Freddie Mac’s weekly survey of mortgage rates.
Rates have slumped for months and have lingered near record lows. Low rates have not increased new house sales as had been expected. In many major US cities, property values continue to decrease, some upwards of 3% since 2010.
With the unemployment rate holding steady at 9%, gas prices heading north of $4.00 a gallon and energy costs rising, Americans no longer have the means nor the credit to purchase a new home. Lending standards have also been tightened and it’s no longer easy for individuals to secure a mortgage. Record foreclosure numbers also lead potential buyers to believe that the prices have yet to bottom out.