Managing money could become a bit more simplified for U.S. consumers looking to buy homes, as Freddie Mac reported Thursday that the growing European debt crisis has caused mortgage rates to slump to some of their lowest levels on record.
Frank Nothaft, Freddie Mac’s vice president and chief economist, said that “these low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit. The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.”
The government-backed financing firm said that rates for 15-year fixed-rate mortgage loans had not been lower in the history if its statistical record, falling all the way to 4.21 percent during the current week.
Homeowners who were unlucky enough to receive their home loans before the current slide in interest rates could find themselves in serious financial difficulty as foreclosure rates stay elevated and credit remains tight.