Jul 1, 2009
Low Mortgage Rates Helping the Housing Market?
There is a very interesting article on Reuters about low mortgage rates helping the housing market located here. It is an interesting perspective in that the article explains that easy money is making home prices look like they are improving. It may very well be the fact that they are not. The artificially low mortgage rates are causing home prices to go up because as mortgage rates decrease, home prices increase. If the government continues to push mortgage rates down to the 5% level, it is all in due time before home prices start rising because mortgage rates are so low.
Do you feel that the housing market has gotten any better? I have many friends who live in states where there seems to be no improvment. The states of Ohio and Indiana continue to see declines in home prices. I have friends and family in each state who have been trying to unload a house since late 2006 and they have yet to get anything close to what they want. Several offers have come in over 20% lower than their asking price. So, are the low mortgage rates making the home price data look better than it actually is?
You said in your post that “artificially low mortgage rates are causing home prices to go up”. I am not sure where you are located, but I am unaware of any homes in my area appreciating in price.