May 23rd, 2016 5:05 AM by Jackie A. Graves, President
Mortgage rates continued their
downhill slide this week, falling to a three-year low of
3.57 percent on a typical 30-year fixed loan. That’s a drop from 3.61 percent
last week and an average 3.85 percent a year ago, according to Freddie Mac.
The last time home loans were this cheap, Icona Pop was working
its way into our ears and we couldn’t wait for Iron Man 3.
It can’t be said enough, home loans are an incredible bargain
right now. We’re not far from the all-time record low of 3.31 percent, which we
hit right before Thanksgiving in 2012. This historic run of cheap borrowing has
been a boon to the housing
Is it possible that mortgages are too cheap? Some people think so.
This week, two regional Fed leaders repeated their worries that this long run of super-cheap borrowing could spell trouble.
“Just as raising rates too quickly can slow the economy and push
inflation to undesirably low levels, keeping rates too low can also create
risks” by prompting businesses and people to take on too much debt, Kansas City
Fed President Esther
Rosengren said. “We witnessed this during both the
housing crisis and the current adjustments in the energy sector.”
The Fed has signaled that it’s likely to raise rates twice before
the end of the year. So far they haven’t moved once. They meet again June 14-15.
Still, after last week’s disappointing jobs
report, Fed watchers are betting
against a rate hike next month.
Remember, the Fed doesn’t control mortgage rates, but what they do
can affect borrowing costs. For now, here’s the big picture.
Woellert, Contributor - To view the original article click here