With mortage rates at all-time lows you'd think it would be an ideal time to buy a house or to refinance, but there are obstacles in the way that make it easier said than done for many people.
Freddie Mac said Thursday the average rate on the 30-year fixed mortgage fell to 3.89 percent, even a few ticks lower than the what rates were weeks ago. The average on the 15-year fixed mortgage also tricked down to 3.16 percent. Darin Wilson from Network Mortgage in Chico says now is the time to buy a house.
"It's a great opportunity for new home buyers and new home-buyers should be looking to purchase right now. I don't expect these rates to stay this low forever," said Wilson.
But for many prospective home buyers and people looking to re-finance, it's tough to take advantage of the record low rates. Chico resident Ernie Lower owns two homes. He's looking to sell his property, but he's having trouble.
"It's impossible because nobody qualifies for a loan. When I moved here all you had to do was put 25% down and you're guaranteed a loan. Nowadays, if you don't need a loan you get one, if you need a loan, you'd never be able to get one," said Lower.
Joanne Smith from Tri Counties Bank explains why she thinks people aren't applying for home loans.
"It's because the government has put restrictions on home loans and people have to prove their income. There's a lot of paperwork involved," said Smith.
Another issue is that homeowners don't have enough equity in their homes in order to sell them and buy another house. Therefore there is no "move-up" market, which means new home sales across the country aren't robust enough to provide evidence that the mortgage market and the economy is recovering. Until there are more signs of improvement, consumer confidence will not be positive enough to drive a housing recovery.
"When more people are working and the economy gets better, the housing market will come back, but the rates will go back up," said Lower.
"This is the way it is now and we have to work with what we have, it's just a lot more work to get done," concluded Wilson.
