10/24/2019

Lower Mortgage Rates Aren’t Likely To Reverse Sagging Home Sales

U.S. mortgage rates have tumbled to their lowest level in nearly three years, but they are unlikely to provide much of a lift to the sluggish home-sales market.

Economists said the rates could provide a modest boost to sales during the final months of this year, though few expect cheaper borrowing costs to reverse the course of a slowing market. Home sales have been weighed down by steep prices and limited starter-home inventory in many markets.

“It’s a bit of an added lease on life for this housing cycle. I don’t think it’s going to dramatically change anything,” said Issi Romem, senior director of housing and urban economics at Zillow.

Average rates for a 30-year mortgage hit their lowest level since November 2016, falling to 3.6% from 3.75% last week, Freddie Mac said on Thursday. Those mortgage rates have been falling for much of this year, after hitting nearly 5% in November.

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