How’s this for clashing superlatives? Mortgage rates have fallen to their lowest levels of the last 50 years, and yet signed home-purchase contracts plunged by 30% in May from April.
There are simple explanations behind both, but it doesn’t change the fact that the housing market will be struggling throughout the summer as it adjusts to a more normal market—one without the government propping up demand with tax credits.
Mortgage rates fell to 4.58% this week on 30-year fixed-rate loans, according to Freddie Mac’s weekly survey. That beats last week’s mark of 4.69%, which was already the lowest since Freddie’s count began in 1971. Average rates on 15-year fixed-rate loans were down to a record-low 4.04%.
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