The rate for a 30 year fixed mortgage hit an all time low of 4.85% today and represents the lowest mortgage rates on record for a fixed 30 year term. I'm sure everyone in the housing industry hope that that this will inspire people to seek mortgage loans so the housing market can start to rebound.
This is the first time the mortgage rate has hit such a low and even though it shows light at the end of the tunnel, some experts are saying it will not enable people with sketchy credit to get into the market. Banks are cautious and, no doubt, are trying to lower the default rate and their exposure.
New Home purchases actually increased in February over January, spurred by lower mortgage rates. Hopefully the trend will increase. Anything that will help consumer confidence is good at this point in time for private banking. However sales of new homes actually decreased over the same time for 2008 and the sales price decreased.
You can get more information here and here.
Even though this is good news for anyone buying, or considering buying a home, caution is still the best way to proceed. Mortgage rates may be low and the price of homes may have dropped, but you'll still have to qualify for a mortgage, and that's going to be the real test.
Just because we are seeing the Lowest Mortgage Rates on Record for a 30 year fixed rate mortgage, rest assured the financial institutions are going to be very cautious about who they approve.
Refinancing today may also be a good idea if you can qualify.
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