The interest rates on mortgages are at a 17 month low giving millions of home owners in the U.S. the perfect opportunity to save thousands of dollars a year on their payments. The catch is that even with those great numbers, less than 50 percent of all American home owners think it would be easy to refinance and cash in on those savings.


That thought is far from the truth.


In fact, since the early part of 2014, lenders in the U.S. have been telling the federal government that they have loosened the standards lending software leader Ellie Mae shows reported numbers of home loans gliding through the approval process with ease. In addition, the FHA is making more loans possible by lowering credit requirements for buyers. New guidelines from the FHA only require home owners to have a credit score of 580 or better in order to get approval for a new loan or refinance. It hasn’t been easier to get a mortgage since 2008.


It is easy to understand the public’s reticence about the lending process. Sentiment can be hard to recover after a brutal fall, but the public hasn’t been tracking the housing market and lending atmosphere. Home values are going up and interest rates are going down. That makes the housing market a prime opportunity for home buyers.




Fannie Mae keeps regular track of consumer opinions on the housing industry. Every month they publish a report with facts gathered from 1,000 households across the U.S. regarding their thoughts on mortgages, economy and what consumers predict for the near future. It isn’t too surprising to find that what consumers think about the market rarely aligns with reality. In fact, what really is surprising is how wrong consumers tend to be about it.


As an example, 12 months ago, consumers surveyed showed that they felt home costs would go up through the year to come by about 3.4%. The reality is that home values rose by an average of 4.5%. Some areas of the country even experienced gains of more than 10%. In the same time frame, nearly all consumers surveyed felt that interest rates on mortgages were as low as they were going to be. However, in this last year, interest rates on home loans fell by 25 basis points, an amount equal to 25%. Instead of a lull, refinancing is in a boom period.


It is hard for the average consumer to predict the future.


The October National Housing Survey predicts home values to go up almost 3% in the next 12 months. For investors, that presents a great opportunity to buy homes cheap and gain equity and worth over a single year. 44% of home owners surveyed felt that now is a good time to sell. The 1 point increase since September 2014 is the highest it has been since Fannie Mae started the survey. The low number of home owners who feel it is a good time to sell shows a significant fear in the consumer market that a seller will get top value for their home.


However, the real data produced by market surveys shows that it is currently a seller’s market.


Inventory in the United States remains low and with the great values available to home buyers and easing of loan requirements making buyers come to the market in higher numbers, that means the laws of supply and demand are in effect, and sellers have the leverage. According to industry figures, the home supply is below 6.0 months, meaning there aren’t enough available homes currently on the market to last 6 months, which is the dividing line between a seller’s and a buyer’s markets. Prices are high and continue to rise.


So, in spite of consumer opinion, it is a great time to sell a home. Competition is strong when a home is priced properly. Low interest rates mean buyers can afford to bid higher on the homes they want, and great values are available for everybody.




When it comes to what consumers think about the next 12 months, the Fannie Mae survey shows that people feel the majority believe interest will rise. Only 6 percent of consumers think that mortgage interest rates will continue to fall between now and the same time next year.


This gloomy prediction is on par with predictions going back as far as 2011; and for the most part, consumers have been wrong. With the exception of a mild spike between May and September in 2013, interest rates on home loans have been on a decline going back as much as 5 years. There are no signs indicating that the trend is at its limit and any kind of reversal is in order.


Mortgage backer Freddie Mac shows 30-year conventional home loans staying at a fixed rate of 4.02% across the nation when buyers are able to pay down points by at least 0.5 points along with their closing costs. This is lower than the 4.57% of 12 months prior.


Current interest rates are 3% throughout the month of October.


The mortgage rates are low, and have been low all year long. With a standard HARP loan for refinancing a home mortgage, most home owners save as much as 30% per year. These savings allow home owners to meet the requirements of Net Tangible Savings much easier. Savings are also huge with the Streamline Refinance program from the VA, and lenders across the country are quoting interest rates and APR in the 3 percent area. Now is a great time to compare interest rates with the current values.