Consumption stimulation: Record-low mortgage rates

Freddie Mac reported once more that mortgage rates for 30 and 15-year loans fell to low levels in decades, reaching 4.17 and 3.57 percent, respectively. The rates were previously around 4.24 for 30-year-fixed mortgages, and 3.63 for 15-year ones, both rates from last week. As a result, rates are at their lowest since 1971.

This is part of a bigger government effort to stimulate consumers to buy properties, and move the quiet real estate market in some places, specially after the foreclosure scandal of doubtious administrative proceedures to repossess properties. The effort to stimulate economy includes in a big proportion the need to lower mortgage rates.

Such was, among other things, one of the statements of the US in the G-20 meeting that took place on Tuesday in Seoul, South Korea. The US position was to keep on stimulating consumption by creating attractive credit options, having banks’ health as a primary issue to guarantee wider financial products. This matter impacts real estate market nationwide, as well as South Florida’s local market.