The U.S. housing markets are beginning to return to a healthier condition. Low rates for mortgages can only help recovery. They fell again during the past week. The average rate for a 30-year mortgage with a fixed rate went down to 3.79 percent as reported by Freddie Mac. This is close to a full percentage point less than the rate one year ago on this type of mortgage.
Prospective homeowners are welcoming this incentive to buy now. A new wave of activity is certainly inspiring the Realtors and lending institutions. One expert remarked that it resembled a rerun of 2005 in the industry.
The current European debt crisis has a strong influence on those prospective buyers who are considering real estate as an investment rather than a home. U.S. Treasury Bonds are considered a safer investment. Those who are already homeowners are taking this opportunity of low mortgage rates to refinance their homes. Banks welcome the opportunity to serve them as long as their credit is A-1.
The lax lending standards that instigated the real estate mess in the first place are now largely a thing of the past. Good credit, if not excellent credit, is mandatory for an applicant. Most banks and lending institutions are requiring a down payment of 20 percent. This excludes many buyers who would have qualified in earlier times.
One week ago it was reported that mortgage rates fell each week for four weeks, setting a new record. Now there are signs that banks are relaxing their standards somewhat. A person who was refused six months ago may want to reapply. People are applying in increasing numbers. Applications increased by 9.2 percent in the week of May 11.
Housing markets have been improving in many locations although certain cities and states see less progress than others.