Mortgage rates nose-dive, house prices decline in the US

United States, 20th May: Mortgage rates in the US are going down as the nation struggles to cope with the weakening housing market.

The housing market is not going to show any signs of recovery in the near future due to interest rates moving to record low levels.

As per the official figures, mortgage rates touched lowest point as sales of pre-occupied homes witnessed a sharp decline of 0.8 in April this year. This is a clear sign of the housing industry struggling as the US economy shows signs of expansion.

Is it time to buy home in the US--According to National Association of Realtors, purchase of existing houses in the US went down to 5.05 million annual pace in May this year. And the median sales price of houses went down from the previous year. There has been a drop of 30 percent in the median price of a single family house in the US taking the price down from $227,100 in the year 2006 to $158,700 this year, the National Association of Realtors states.

The value of homes in the US dipped by 3 percent from January to March this year and this is being regarded as the biggest quarterly fall since the year 2008.

Talking of the mortgage rates in the US, 30-year fixed-rate mortgage went down 5 basis points to 4.77 percent, reveals the national survey of big lenders by Bankrate.com. And there has been a fall of 5 basis points in the benchmark 15 year fixed-rate mortgage as well bringing the rate to 3.95 percent.

This happens to be lowest mortgage rate(on 30-year fixed-rate mortgage) in the period of five months or so.

What does this mean for an average American?-- Well, with more foreclosures likely to enter the housing market and prices of homes in the US already going down, people are going to be reluctant to buy new homes in the US,

What do the economists project about the US housing market-With rate of joblessness in the US already staying high at 9 percent with no signs of imminent improvements in the US wages, the US real estate is not going to show any signs of steady improvements in at least the next couple of years, feel economists in the US.

An economist at Parthenon Group, Boston, Richard DeKaser, the US real estate market is staying along the bottom and the future is not bright. There is no sign of market recovery, he adds. Purchases slumped from the bright figures of 7.08 million in the year 2005 to touch a 13-year record low of 4.91 million in 2010.