It appears that rock bottom mortgage rates have yet to cure the housing industry's woes.
According to two separate data sets released Thursday, the rate offered on a 30-year fixed-rate loan fell to another all-time low for the week ending September 29 (4.01%), but pending home sales declined.
The National Association of Realtors reported that pending sales in August fell 1.2% on a sequential basis, but compared to the same month a year prior rose 7.7%.
NAR, which tracks pending deals through an index, noted that the prospect for sales is uneven. “The biggest monthly decline was in the Northeast, which was significantly disrupted by Hurricane Irene in the closing weekend of August,” said trade group chief economist Lawrence Yun. “But broadly speaking, contract signing activity has been holding in a narrow range for many months.”
He predicted that the housing market is underperforming, given what the trade group describes as a “pent-up demand” in household formation.
“We continue to experience a pattern in which financially qualified home buyers, willing to stay well within their means, are being denied credit – a factor in elevated levels of contract failures,” Yun said.
As for rates, with the yield on the benchmark 10-year Treasury bobbing above 2% Thursday, it's possible that the all-time low established this week may be one for the record books.
