A recent article on Realtor.com highlights the positive impact this past month’s decline in mortgage interest rates might have on home buyers. The 30-year fixed-rate mortgage averaged 4.35% in the week of February 21, which is down from the 4.37% rate in the prior week. These figures are cited by Freddie Mac.
The decline in mortgage interest rates means that more home buyers will look to buy new homes this spring. Real estate assets are increasingly being viewed as safe-haven assets during the ongoing U.S.-China trade crisis.
However, despite the fall in interest rates, other factors will continue to dissuade many potential home buyers. According to a survey conducted by Freedom Financial’s subsidiary Freedom Debt Relief, large accumulations of debt discourage people from buying homes. Debt can take the form of student loans, credit card balances, and medical expenses.
Federal Reserve Chairman, Jerome Powell, has recently commented that bond yields are currently caught between “cross currents,” which perhaps also accurately describe the spot many potential home buyers are in when deciding whether to purchase a new home. Potential home buyers should remain alert to declining mortgage rates. However, as the Freedom Debt Relief survey reminds us, interest rates are only one of many factors to consider when buying a new house.