Although mortgage rates hit a 50-year low last week, don't expect them to bail out the ailing U.S. housing market.
According to a new report from Standard & Poor's, home prices and sales have been weak even though the average 30-year fixed mortgage rate has been near or below 5% since 2009.
The rating agency said the housing market continues to be a “drag on the economy."
Although 30-year FRMs offered at under 4% may not revive housing much, low rates have certainly spurred mortgage refinance applications to revive. Not only are economists quickly reviving their production forecasts for the remainder of the year, but lenders are once again carefully staffing up to handle the incoming volume.
Meanwhile, S&P reports that default rates are falling on many different types of consumer loans, including mortgages, auto, and credit cards. The declines represent both sequential and year-over-year drops.
