arkansas lakehouseThe Lowest Home Loans rates in recent history are now available to those who can swing the financing. The demand for the lowest home loans rates in 13-years is at a record low, and refinancing demands are also down despite the historic low rates, reports the Mortgage Bankers Association. Requests for loans for buy homes have dropped to the lowest level since December 1996.

Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent. Average 30-year mortgage rates edged up 0.01 percentage point to 4.69 percent, but were near the record low of 4.61 percent set in March 2009, based on MBA records dating back to 1990.

Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance. But high unemployment and foreclosures remain major hurdles, and worries that prices could dip further are also keeping many potential buyers on the sidelines. The expiration of homebuyer tax credits has also sapped purchasing activity. Buyers had raced to get in under the gun for the tax incentives, and demand for loans to buy homes has fallen in nine out of the 10 weeks since the credit expired.

Refinancing now accounts for 78.7 percent of all applications. Talk has surfaced of a double-dip in U.S. housing, though most economists doubt a second leg down would be nearly as severe as the first. It’s sort of a self-fulfilling prophecy, but if there’s going to be a double-dip you might as well stay on the sidelines as opposed to coming in to buy. With as much turmoil as there is around loans that need to be modified, short sales, foreclosures – all of those signs really indicate to buyers and investors that there may be better prices tomorrow.

Prices have toppled about 30 percent, on average, from their peaks four years ago, according to Standard & Poor’s/Case-Shiller indexes. Most estimates are for additional single-digit declines. If there’s one part of the economy that might suffer some sort of a double-dip it might come out of the housing market. Housing economists look for autumn months to tell the story since the ripple effects of the expired tax incentives are past. Demand for the lowest home loans has shifted to first-time homebuyers credit.

Back to the top of Lowest Home Loans.