There is a lot happening in the mortgage industry today. This week U.S. mortgage rates edged slightly higher, veering away from all time lows that have held precedent lately. Total Mortgage Services wrote a great article on the rising mortgage rates and the article proves to be a great read for anyone interested in the mortgage industry. At the same time, Europe faces a large amount of economic instability, causing the mortgage industry to take a step back and be more cautious about writing loans. Bloomberg's report on the U.K. mortgage economy describes what is happening very well.
To sum up the two articles, mortgage rates in the united states are beginning to see an increase from their all time lows recently experience. Rates are increasing as lenders begin to see a recovery in the housing market. This recovery has been stimulated vigorously by low mortgage rates, as well as a loss of confidence in the stock market due to European woes. People are flocking to houses as an investment as opposed to keeping their money locked up on the stock market. This is a great sign for the mortgage and housing industry as it signals a return in confidence not seen since the crash of the housing market in 2008. But with rates increasing and still more economic distress to come, what is the best move to make?
Clearly in England for the banks the best move to make involves cutting the number of mortgage loans written. In the article by Bloomberg, the number of approved mortgage loans fell by 18% this past month. That number is staggering and comes on the tails of weak economic numbers and an overall negative outlook of the Eurozone economy. Clearly lenders in Europe foresee some turmoil in the housing market and have decreased their risk by writing less mortgage loans.
As for an individual living in the United States, rates are extremely low, housing prices still have not recovered fully, and the stock market is volatile. If you have the ability to invest in housing, now is the time to do it before the credit markets tighten up and the rates increase. There are many types of mortgage loans out their to satisfy any investment needs so really consider giving a housing investment a thorough look right now. I will inform you in another daily post if the situation changes.
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