Professor Mark J. Perry's Blog for Economics and Finance
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Thursday, June 24, 2010
Mortgage Rates Set Record Low 4.69%
Mortgage rates (30-year fixed) fell this week to 4.69%, according to data released today by Freddie Mac, setting an all-time record low, going back to at least 1964 (see chart above, data here).
it's interesting that despite such low levels.mortgage application and issuance remains low.
this is likely due to more stringent lending standards which are going to counteract some of the benefits of the low rates. there's really nothing that can be done about it as standards had clearly been far too lax for some time and needed tightening, but it is going to make recovery slower.
it will take some time to work off the excesses of the last decade.
"The boom gets started with an expansion of credit The Fed sets rates low, are you starting to get it? That new money is confused for real loanable funds But it’s just inflation that’s driving the ones
Who invest in new projects like housing construction The boom plants the seeds for its future destruction The savings aren’t real, consumption’s up too And the grasping for resources reveals there’s too few
So the boom turns to bust as the interest rates rise With the costs of production, price signals were lies The boom was a binge that’s a matter of fact Now its devalued capital that makes up the slack."
http://calculatedriskimages.blogspot.com/2010/06/mba-purchase-index-june-23-2010.html
ReplyDeleteit's interesting that despite such low levels.mortgage application and issuance remains low.
this is likely due to more stringent lending standards which are going to counteract some of the benefits of the low rates. there's really nothing that can be done about it as standards had clearly been far too lax for some time and needed tightening, but it is going to make recovery slower.
it will take some time to work off the excesses of the last decade.
"according to data released today by Freddie Mac"...
ReplyDeleteHmmm, so just how credible is a GSE that's sucking taxpayers dry?
I really wish I could get more than 0% on my savings.
ReplyDelete4.69% would be like heaven
New home sales plummet 33% to set record low after mortgage welfare program ends.
ReplyDeleteReminds me of a song:
ReplyDelete"The boom gets started with an expansion of credit
The Fed sets rates low, are you starting to get it?
That new money is confused for real loanable funds
But it’s just inflation that’s driving the ones
Who invest in new projects like housing construction
The boom plants the seeds for its future destruction
The savings aren’t real, consumption’s up too
And the grasping for resources reveals there’s too few
So the boom turns to bust as the interest rates rise
With the costs of production, price signals were lies
The boom was a binge that’s a matter of fact
Now its devalued capital that makes up the slack."