Mortgage Rate News

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Many people acknowledge that now is a great time to buy a home, if you can. Mortgage rates are near historic lows, and home prices are also quite low. It’s a buyer’s market, and you can get concessions and other helpful items from sellers. However, the downside to all of this is that it can be difficult to qualify for mortgages. This is because mortgage lenders have tightened their standards. You have to have a good credit score, and a down payment of at least 5% in many cases, if you want the best rates. If you have fair credit and no down payment, you might not even get a home mortgage loan from anyone. As a result, it is little surprise that many real estate contracts are falling through.

But, even if you can’t get approved for a mortgage, you still have options. Because it’s a renter’s, thanks to the recent recession. The vacancy rate moved up 8% in the final months of 2009, reports Reis Inc. This is a difference from vacancy rates just a year ago: 6.7%. CNN Money reports on the reasons that vacancy rates are rising:

The main culprit is, of course, the recession, according to Reis economist Ryan Severino. Not only do people lose their jobs during downturns, many others are afraid of being laid off. And they all feel pressure to reduce their housing costs.

“Household formation rates slow down during recessions,” said Severino. “They may move in with their families or rent larger apartments and partner up with friends. They partner with others much more then they do during more prosperous times.“

As a result, with supply exceeding demand, prices have fallen 3%. If you think that rental rates are going to rise in the next couple of years as the economy recovers, you might see if you can lock in your rate (of course, it might mean committing to stay in the rental). Many landlords are willing to do a little extra for tenants who are willing to stay. After all, empty rental units make no money.