Mortgage Rate News

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News about the housing market is in, and it appears that housing starts are showing an increase for January. This is good news for the economy, since it shows that the housing market might be stabilizing. At least for now.

MarketWatch reports on the latest housing starts data:

Permits for single-family homes, considered by many analysts to be the key number in the report, rose 0.4% to a seasonally adjusted annual rate of 507,000.

Starts of single-family homes increased 1.5% to an annual rate of 484,000.

The more-volatile multi-family starts drove much of the increase in January, rising 9.2%.

Housing starts have now risen 21.1% in the past year, the largest year-over-year increase since April 2004.

There are hopes that the extension and expansion of the home buyer tax credit will help the housing market, and help housing starts. Also, there is speculation that low mortgage rates should help increase interest in home buying. However, there are other issues that builders have to contend with. Foreclosures remain a problem, as do attempts to sell homes at low costs. This means that with the glut of homes on the market, housing starts may not continue increasing. It is also telling that multi-family construction is driving the increase, indicating that rentals are up — not homebuying.

Another issue is what happens when government aid programs dry up. Will we see a sudden decrease in housing starts? After all, some of the stabilization is coming from the home buyer tax credit being offered. When the tax credit is gone, will people still be interested in buying homes?

For now, there appears to be more interest in refinancing. With such low mortgage rates, it is a perfect time to refinance to a lower interest rate and payment. A refinance can provide a little more breathing room, and it is a good way to save money in the long run on interest charges.