Mortgage Rates Keep Falling to Record Low

It would seem that there is no bottom to the hole that U.S. mortgage rates are falling into. 30 year and 15 year fixed rate mortgages are down from last week, when the rates were already at a record low, and they now sit at around 3.78% (30 year fixed) and 3.08% (15 year fixed) according to Bankrate.com. There has been a cultural shift in the U.S, over the past few years, and certainly while the economic crisis has been going on. It used to be that owning a home was a big part of the "American Dream". It was something significant and realistic to aim for. However, it is now deemed perfectly acceptable and normal for a family to rent a house with no plan to buy at a later date. For some families, even those considered middle class, buying a house in 2012 is simply not a realistic option. One would imagine that the fact that the mortgage rates are at record lows would help with that, and encourage those sitting right on the line of "can/cannot afford" to jump into buying. However, the volatile nature of the U.S. housing market, and the economy in general, has made people reticent to make such a huge purchase. According to a survey from the National Association of Home Builders, 77.5% of all homes sold during the first quarter of 2012 qualified as affordable for families who bring in the U.S. median household income of $65,000. However, it is not just the mindset of potential homeowners that has changed, as tighter lending standards have made it far more difficult to buy a home even if, on paper, it is affordable. It is also worth noting that, while the mortgage rates are indeed at record lows, those rates are not available to every buyer under the new, stricter guidelines. Rather, consumers are having to pay for alternative financing or put a hold on their purchase until they have enough of a down payment and have built up their credit enough to qualify. In other words, the whole thing is tremendously misleading. Because of all that, the number of applications for a mortgage in the U.S. fell last week, even as the rates were hitting those record lows. The number of applications dropped 1.3% in the week ending May 25.