Low Mortgage Rates Provide Little Impact on Housing Activity

It’s been a rough news week for the U.S. real estate market. Though mortgage rates continue to inch up, they are still relatively low — not that they are doing much to spur activity in the industry.
Freddie Mac released its Primary Mortgage Market Survey for the week ending March 31 with these results:
*30-year fixed-rate mortgage (FRM): Increased from 4.81 percent last week to 4.86 percent this week. At this time last year, it averaged 5.08 percent.
*15-year FRM: Increased from 4.04 percent last week to 4.09 percent this week. At this time last year, it averaged 4.39 percent
*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Increased from 3.62 percent last week to 3.7 percent this week. A year ago, it averaged 4.10 percent
*1-year Treasury-indexed ARM: Increased from 3.21 percent last week to 3.26 percent this week. A year ago, it averaged 4.05 percent.
“Fixed mortgage rates rose slightly for a second week in a row, but continue to remain quite low,” said Frank Nothaft, vice president and chief economist from Freddie Mac.
“Sales of distressed properties continue to place downward pressure on house prices. In January, these homes accounted for 37 percent of existing home sales and rose to 39 percent in February, based on figures from the National Association of Realtors®. House prices were down 3.1 percent in January from the same month last year according to the S&P/Case-Shiller® Home Price Indices.”
In addition, mortgage applications fell 7.5 percent and the Refinance Index dropped 10.1 percent for the week ending March 25, according to the Mortgage Bankers Association.
All rough news. But the year is young.
The Labor Department announced today that the amount of people seeking unemployment benefits for the week ending March 26 dropped by 6,000, the second decline in three weeks.
And there are reports that more than half of the largest companies in the country will be hiring over the next six months.
Let’s hope those upcoming months provide more positive housing news.