30 Year Mortgages at Record Lows Many Orlando homes for sale are bank-owned and have low mortgage rates. Homebuyers can take advantage of these low prices. A 30-year mortgage means that the homeowner is able to pay off their house in 30 years. However, due to the lowest recorded prices for mortgages, more homeowners are turning to refinancing and cannot pay their mortgage. Why Mortgages Are at Record Lows When searching for Orlando homes for sale, keep in mind that the mortgage price could be lower than the house is worth. The 30-year mortgage rate has been under 4% for all of 2012. This rate will continue to drop, as predicted by economists. Orlando homes for sale are on the low end of mortgage rates as well. Inexpensive mortgages are causing the housing market to go up and down in an uneven pattern. The mortgage rate is determined by the U.S. Federal Reserve and can be influenced by world economies and their financial situations. Why Nobody is Buying Houses Many people are not buying Orlando homes for sale because of the poor economy and loss of jobs. When the unemployment rate is up, the housing market usually goes down. The downturned economy is just one factor that prevents potential buyers from putting an offer on a house. Another reason that potential homebuyers are not making offers is because some cannot qualify for a housing loan. Some potential homebuyers are not able to afford the large down payment on a house either. Mortgage Rates Help Housing Market Homeowners who refinance their mortgage could help the housing market go up by taking advantage of the lower mortgage rates. Homeowners can refinance their mortgage in order to get these lower rates, thereby saving money. In turn, these homeowners can spend the money they save on home repairs and other things for the home, such as furniture. The money they use to buy these goods will put fuel into the economy. More people will buy Orlando homes for sale because the mortgage payments will be extremely low and first time home buyers are more likely to make an offer on a house. The payments will also be lower and buyers will be able to afford larger houses. Bank Loans Stricter Potential buyers that are looking to purchase Orlando homes for sale will find that the housing market is slowly dwindling down and the housing prices will reflect the downturn. These Orlando homes for sale are still not at the best prices, or interest rates, as they were in the past. As more and more home buyers are applying and getting denied for housing loans, fewer houses will be bought. Banks are imposing stricter standards for borrowers who want to take out a home loan. Since the economy has taken a downturn, most home owners are not able to pay back their loans. Recovering Housing Market Despite the lowered costs of mortgages, the housing market is still taking a long time to be restored to its former glory. The housing market relies heavily on the job market since they are dependent on each other. When one market increases, so will the other. If more people were employed, more money would be made and this money could be put back in the economy. People who want to buy houses will be able to at least afford the down payment or be better qualified for the loan. A 30-year mortgage can have a substantial interest rate so homeowners are paying more than the house is worth, but the monthly payments are still lower than a 15-year mortgage.
The Future of Housing Markets Potential buyers must still have a decent credit score despite the falling mortgage rates. Mortgage applications and refinancing options have steadily been on the increase as mortgage rates continue to fall. First time homebuyers are slightly nervous to buy a home because the housing market looks so bleak. However, those who want to take advantage of the low mortgage rates should act as soon as possible because the rates are expected to rise in the next few years. For those struggling to pay their mortgages, economists agree that renting out the house could help alleviate some financial responsibilities and the money could go to paying back the mortgage. Housing Competition The housing market goes through trends and cycles each year. Even though the housing market is down at the moment, it will still bounce back eventually. Many Americans are wary of purchasing a house and want to wait until the housing market is back on its feet. However, a sluggish housing market often offers great deals for the budget-conscious homebuyer. Along with the drop in mortgage rates, the housing values are falling too. There are only a limited number of houses on the market at one time so competitions can get fierce. Orlando homes for sale are in a competitive market despite the overall poor housing market. Bidding on a house can be risky, as bidders who lose also lose the opportunity for a house. Home Values and Costs The values of homes are also declining due to the high number of foreclosures. Homeowners that lose their jobs or are struggling financially are not able to pay their mortgage. Economists are predicting housing prices to drop along with the mortgage rates. For those who rent homes, it seems rental costs are on the rise as well. This high cost of renting is prompting people to buy their homes instead of paying rent each month. Buying the home allows the owners to take advantage of the lower mortgages fees found in a struggling economy. Buyers looking for Orlando homes for sale will note that the houses are priced cheaper than ever due to the 30-year mortgages that are at a record low. However, the low prices will not stay cheap for long. Buyers that take advantage of these low mortgage rates are slowly helping the housing market to make a comeback by putting more money back in the economy.