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24/7 Wall Street presents and interesting angle on the role of mortgage rates in recovering the housing market. Are we in an economy where factors and anxiety around unemployment and investment make it such that mortgage rates are too much at any cost?
While some data shows that housing may be finding a bottom, it is likely that very few people are willing to gamble their own money that the perception is true. If unemployment rises, housing prices could continue to fall. If foreclosures rise, the value of homes could tumble anther 10% or more. Of course, people thinking about buying a house have to be concerned with their own jobs. Low mortgage rates don’t matter to the unemployed.
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About Bill Rice
Hey Bill,
I can definitely see where they’re coming from. I’m not sure though whether or not I’d say that “low mortgage rates don’t matter.” I think they definitely matter, they’re just not as effective during a recession. I’d say they would matter more the lower they got, but as you pointed out, unemployment is the ultimate variable keeping the housing market from ultimately recovering. Low mortgage rates do matter — they’ve allowed thousands to refi into better mortgages — but unfortunately, unemployment matters more.
Nice post, I’ll be checking back frequently.
Thanks,
Tim