Consistent Increase in Mortgage Rates Causes Struggling Home Sales

Interest rates for mortgage have been continuously increasing. This resulted in a decrease in home sales for various regions in the United States. In the Pittsburgh area in Pennsylvania, sales figures decreased by 3.3 percent in the previous month. In March, the average home prices in the same area decreased by 3.8 percent compared to the month of February. The Northeast region is greatly struggling in home sales.

This data shows a negative trend from an annual point of view. Data from home sales all over the country is similar to the Northeast scenario. The increase in interest rates for long term mortgage is putting a negative pressure in the housing sector at this time. In the previous week, a national survey conducted by Bankrate showed that the standard for a 30 year fixed rate mortgage increase by 7 basis points that resulted to 5.08%. On top of that, bad credit loans seem to be nowhere to be found. If you have bad credit, it’s probably not worth trying for any loans.

Prior to the month when this survey was conducted, the fixed mortgage rate for a 30 year period was only at 5.04%. Similarly, a 15 year fixed rate mortgage increased by 2 points to end at 4.27%.

The readings that showed increased interest rates build a consistent trend for the past few weeks. This is alarming as it shows the continuous decline and struggle of home sales. Data shows that the general trend for home sales has been negative compared to the last recession.

Moreover, the Northeast region of the country is the area that is mostly suffering from this situation according to the data of the Census Bureau. If mortgage rates fight back, home sales will be strengthened. The borrowing charges for home loans showed a slight improvement this week. This is a correction to the fees last week. So far, the best mortgage rate for a 30 year fixed loan is at 5.0 percent. But, the rates differ based on the situation and area. This is something to consider when looking for the best mortgage rates.

These mortgage rates also hold for refinances. As well, chances for a bad credit refinance are very slim. Currently, only those with stellar credit scores are seen as a low risk investment for banks.