Unbelievable! Mortgage Rates Drop Below 4.5 Percent

Do you remember the days when everybody was just hoping that mortgage rates would drop below 5 percent once again? It doesn’t seem like those days were very long ago. In fact, it was just a few months ago. Now, mortgage rates are below 5 percent. Not only that, but you might even be able to qualify for a rate that’s below 4.5 percent. How much lower are they going to go?

According to Freddie Mac, the average mortgage rates for a 30-year fixed rate loan fell once again to a record low 4.36 percent. That’s the ninth week in 10 weeks that mortgage rates have dropped and there doesn’t seem to be an end in sight. Since the first week of August, these same mortgage rates have been below 4.5 percent. Since May, the average mortgage rates for a 30-year fixed mortgage has been below 5 percent. Those are exciting numbers for people who want to purchase a home or refinance now that their credit situation is better than it was when they purchased their home.

The news is even better for 15-year fixed rate home loans. If you qualify for the lowest rate, you can get a loan at about 3.86 percent. For homebuyers who prefer an adjustable rate mortgage, you may be able to get a loan at 3.5 percent.


Analysts are citing three reasons for the constant declines in the housing market and mortgage rates. For one thing, the mortgage industry and housing market is in distress right now and it has been for some time. The lowering mortgage rates are a sign and symptom of that problem. In addition, the federal government is also producing policies that are designed to increase demand for homes, which also helps lower the rates. Finally, there is an overwhelming feeling that deflation is just around the corner.

Unfortunately, the record-low mortgage rates are not doing much to increase home sales recently. The number of sales in July fell by more than 275,000 units, which is more than a 12 percent drop. According to the National Association of Realtors, the number of existing home sales has gone down by more than one quarter, which is the lowest existing home sales figure in at least 15 years. Unemployment continues to be a major factor in the number of home sales recently and the economy has left fewer people in the position to borrow money to buy a home.


So there is both good news and bad news in the mortgage industry. Hopefully things will start to turn around in the coming months so more people can take advantage of these record-low mortgage rates. We’ll just have to see what happens.