Mortgage Rates Rebound After Record Low

October 14 00:00 2011

New York, October 14 ( – After dipping to a record low of 3.94% last week, the average rate on the 30-year fixed mortgage rebound Thursday to 4.12%. The 15-year fixed mortgage rate had also created a record low at 3.26% last week but they jumped to 3.37% Thursday. However, the steep decline in mortgage rates has not been able to cheer the housing market which is still struggling with weakening sales and falling home prices.

Although mortgage rates were closer to 6.5% just five years ago, they hovered below 5% all but two weeks in the past year. Sales of new homes are set to label 2011 as the lowest on records dating back a half century and home re-sales are expected to be among the worst in 14 years. With unemployment touching 9% for more than two years and millions of foreclosures looming large on the horizon, most Americans are finding home-buying to be too big a risk.

Even those Americans who are willing to brave the staggering economy and buy a home find that they cannot qualify for the same because banks are insisting on higher credit scores and 20% down payments for first-time buyers. Moreover, many buyers do not have adequate equity in their homes to qualify.

A survey by the National Foundation for Credit Counseling has found that only about 50% Americans feel that they will ever be able to save enough money for a down payment.