Just what is it going to take to initiate home sales and refinancing of custom built homes in Pawleys Island if the current low interest rates aren’t going to do it? The average rate on the 30-year fixed mortgage fell to 3.98 percent recently. Weeks ago, it dropped to a record low of 3.94 percent according to the National Bureau of Economic Research. Even the average rate on a 15-year fixed mortgage edged down to 3.3 percent from 3.31 percent.
Low mortgage rates haven’t translated into higher home sales of custom built homes in Pawleys Island or anywhere else for that matter. Across the country mortgage applications dropped 1.2 percent yet again, as reported by the the Mortgage Bankers Association. The low rates have caused a modest boom in refinancing, but that benefit will soon be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
High unemployment and scant wage increases have made it more difficult for many people to qualify for loans but lots of people aren’t even applying. Many Americans don’t want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have. Custom built homes in Pawleys Island and elsewhere remain on the market offering buyers sweet prices on primary homes or vacation investment properties.