Will we see new lows for mortgage rates?

Question

Today's Wall Street Journal: Mortgage Rate Falls to 2011 Low

http://online.wsj.com/article/SB10001424052702304066504576347801309818690.html?mod=WSJ_RealEstate_LeftTopNews

At the same time the housing market is very anemic:
Pending home sales dive 11.6 percent in April

http://finance.yahoo.com/news/Instant-view-Pending-home-rb-2187391237.html?x=0&sec=topStories&pos=1&asset=&ccode=

Will rates keep dropping?  How will the mortgage market affect your investing?

Will Barnard · Answer

Buyers today are at a premium and we are truely in a very strong buyers market for RE.

Jeff N. · Answer

You have a few options as a veteran that others can get.  Such as VA loans which allow you to get no money down mortgages and not have to pay mortgage insurance.

But IMO the military credit unions never got caught up in the mortgage mess.  Allowing them to lend at pretty much the same criteria as before.  Most due to them not selling their mortgages, so they had a vested interest in maintaining performing notes.

Good luck on getting approved.

Account Closed · Answer

Rates are artificially low.  There will be more and more pressure to increase these rates over time.

Tim G. · Answer

Jeff,

I'm new to all of this but I'm also in a military area and it seems they are eligible for loans that have terms not available to a civilian.

I'm looking right now to get pre approved and I'll see where I stand.  I'll share the results once I'm done.

Jeff N. · Answer

I live in a military town, which inherently has a lot of RE turnover.  I really do not see much more lending obstructions with buying today than I did five years ago.  The people that did not over-leverage and treat their home as a credit card are having no difficulty getting financed with little down, as long as they can document required, stable income.

I'm only seeing tighter requirements on the REI lending.  Even there, with 25-35% down you have a myriad of options.

Mitch Kronowit · Answer

This question was answered, arguably, in the Orange County Register this week. We no longer have an affordability problem. What we have is a "lendability" problem. IOW, there are many people who want to buy now, at these low prices, but since they don't have enough cash to pay in full they need still financing. And we all know where we stand there with the banks.  :roll:

Jon Klaus · Answer

Diana Olick asks a better question:

If Mortgage Rates Keep Falling, Why Are Home Sales So Bad?
http://www.cnbc.com/id/43193955

Jon Klaus · Answer

That 11.6% drop will likely be adjusted.  And new home sales were up just a bit.  Still, the housing market is sick and rates are dropping.

Jeff N. · Answer

Wow, 11.6%, thats huge!  I think the "experts" were predicting about a 1% decline.

Market seems unphased though.  I think investors are starting to live with the thought that RE is in the toilet for the foreseeable future.