"Mortgage rates go on surprising downturn" by E. Scott Reckard
The Daily Press
May 13, 2014
According to this article, the expectation held by experts that the mortgage rate would rise 5% this year has been proved wrong. This year, some lenders have offered 30-year fixed home loans at a rate of 4.21%.
Jeff Lazerson said that certain borrowers with excellent credit are able to get 30-year home loans with a fixed rate of slightly less than 4%. Competition has also lowered the rates. Currently, demand for homes is lower, so that has made the rates lower too.
(The words is bold were actually used in the article.)
This article relates to what we are doing/have done in class this year. These mortgages with lower rates are only available to people with excellent credit. This backs up what we have learned in class: that a good credit score opens up better opportunities for you.
Earlier in the year, we discussed competition and demand. Because demand for homes has gone down, competition between home sellers has risen.
That is relieving to know that the mortgage isn't rising and that is incredible how much simple economics vocabulary is tied in. Overall excellent relation and post.
ReplyDeleteIt's interesting how the concepts of competition, demand, and credit that we are learning in class tie into real world news. I think it is a good thing that people with good credit are getting a bit of a break. They have worked hard to keep a good credit score and deserve to have that relief from heavy mortgages. I am also relieved to see that the basic system of competition in our free market is still at work because this means that free enterprise can continue to thrive and that consumers can continue to enjoy products such as a home without paying exorbitant prices.
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