30 Year Mortgage Rates are Creeping Down -Will it Matter?

Freddie Mac, the government sponsored mortgage purchaser is reporting the interest rates on 30-year mortgages fell slightly in the last week – from 6.4% to 6.33%. This represents not only a drop between this week and last week, but between this year and last year at them same time.

The question is does it matter? The monster on our minds isn’t the interest rates – it’s the real estate market. And it seems to me the real estate market isn’t being hurt by interest rates, it’s being hurt by the credit tightening by lenders. People who would have been able to get $300 to $400,000 mortgages in the last couple of years now can’t even get a mortgage for $250,000. In one sense it’s a good thing because the high default and foreclosure rates are bad for the whole economy.

On the other hand I find myself wondering how we’ll get out of the slump if we can’t count on home sales. They don’t seem likely to improve. Several different news sources are saying existing home sales are the worst they’ve been in ten years.

My thinking is the entrepreneurs have to be the answer. We need to create more jobs and more value in the world marketplace so we can export goods and services and import some prosperity. That’s just my take on things though.

Source: money.cnn.com