Mortgage Rates Plummet as Housing and Real-estate Effects Begin to Ripple in Other Sectors of the Economy
The real-estate landscape seems to be experiencing its worst time in history since 2008 after rates for home loans plummeted in tandem with the broader bond market. In fact, it is poised to be the worst setup for the real estate market in the United States for a decade!
Reduction in mortgage rates
Indeed, the August 16th so the fixed-rate mortgage of the 30-year mark average at 4.53%, experiencing a dip of about six points. Additionally, info from Freddie Mac, professional mortgage provider, also showed that the fixed mortgage rate for the 15-year category had also experienced a slight dip from 4.05% to 4.01%.
If that’s not enough, the Treasury indexed 5-year adjustable rate plummeted by three points to average at 3.87%
Surprisingly, these rates do not have any fees included in them when you’re on the verge of obtaining the mortgage loan.
Of note is that mortgage rates, in fact, mimic the trends of the 10-year U.S. As a result of the Treasury note tumbling, investors have looked to direct their capital to safer assets in response to the recent currency crisis in Turkey. Hence, there has been a reduction in bond yields as prices have been on the steady rise.
However, for every cloud, there is a silver lining. This is especially true for borrowers as lower mortgage rates are a boon for them. In fact, it will make it easier to kickstart any housing projects in queue.
That being said, there has been minimal buying taking place for such a long time that potential buyers are simply giving up on making any new purchases.
A dying real-estate market
Sadly, the current sluggishness of the real-estate market will not be felt only by the housing sector alone. Analysts now predict that the effects will ripple through different facets of the economy, in turn hurting economic growth.
The chief economist for Fannie Mae, Mr. Doug Duncan, issued out a research note on Thursday last week that housing will continue to cripple economic growth as a result of poor motivation and performance when it comes to home-building projects, broker commissions, and home sales.
Rippling effect in the economy
Additionally, the stagnation of the housing market is also poised to adversely affect the labor market as well. In fact, data collected by consultancy firm Challenger, Gray & Christmas revealed on Thursday last week that the percentage of job seekers moving to new cities for employment opportunities recorded its lowest this year.
Indeed, only 10% of job seekers managed to relocate to different cities/ areas for work in under first six months of this year, in comparison to the 19% that did so nearly a decade ago.
According to senior vice President Daren Blomquist affiliated to Attom Data, the more Americans move to new cities in search for greener pastures, the greater the ‘halo effect’ that local economies are experiencing as a result of an increase in home sales. As a matter of fact, Blomquist sees that higher home sales activities actually plays exceptionally well for real estate agents in the locale, further improving the businesses of home stores, as well as moving companies.
More in Loans & Mortgages
Home Insurance Mistakes That Can Seriously Cost You
One of the biggest monthly expenses that comes with buying a house is homeowners insurance which keeps us under the protective...November 7, 2018
Tried and Tested Career Tricks to Achieve Success
Success is defined by Merriam-Webster as “the fact of getting or achieving wealth, respect, or fame.” However, some of the most...November 7, 2018
IBM Acquired Red Hat For $34 Billion, Founder Refused to Take Credit For it
Who would have thought that this ordinary open-source software distributor would become a billion dollar company after being acquired by one...November 7, 2018
Las Vegas 2.0:The Chinese Megacity of Macau that Makes Las Vegas Look Small
Do you know the wealthiest place in the world? If you were thinking ‘Las Vegas’ then you’re close, but not quite....November 7, 2018
Effective Tips for Dealing With Disappointments in Your Career
It is inevitable to feel disappointed at some point in your career. Didn’t get the deal you have worked on for...November 7, 2018
Tesla Announces $6-Billion Investment Plan For Next Two Years
Car manufacturer Tesla wasted no time in announcing an increase in the production and development of new vehicles. Moreover, the company...November 5, 2018
This Company Received $375 Million to Have Robots Make More Pizzas
Everywhere you go around the world, you will find tons of pizza places. In some countries, they even have their own...November 5, 2018
Remodeling With a Credit Card May Not be Such a Good Idea — Here’s Why
Getting your house remodeled could be a good and a bad thing. It is of course good since that means you...November 5, 2018
Important Things You Must Know Before Getting a Pet Insurance
Feeling down, blue, or just bored? Animals have always found a way to cheer us up. They are like friends who...November 2, 2018