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Mortgage rates fall

as rates fall homes become more affordable
as rates fall homes become more affordable
Photo by Justin Sullivan/Getty Images

For the last reporting week of January mortgage rates fell seven basis points to 4.320%. The news came amidst reports from two standard industry housing metrics: New home sales and the Case Shiller index. Both reported numbers down and their impact was one factor for the rate decline.

The benchmark 30 Year mortgage fell as did the popular 15 year mortgage. The data is from the weekly lender survey as reported by secondary giant Freddie Mac (Federal Housing Loan Mortgage Corporation).

For the month rates retreated nearly 20 basis points, as they started 2014 at 4.530%. While rates do bounce around on a daily basis, numbers within 25 basis points are considered normal movement.

The President’s minimum wage hike

President Obama’s proposed minimum wage hike of $10.10 per hour to new federal workers, may be the life-line millions are looking for in becoming home owners. Of course if other private industries follow suite it could be a rippling affect for those previously shut out.

Housing remains the number one expense for consumers. Assuming one can achieve full-time employment and has decent credit there are programs which allow those on the lower income scale to experience “the American Dream.” Yet for some, they may have to cobble together a combination of whatever income is available (as long as it is steady) to meet mortgage qualifying standards, which are based on monthly gross.

As an example based on the new $10.10 hourly rate, which translates into $400 per week or $2,100 per month, a mortgage payment including taxes and insurance of $685 is achievable. Based on current rates, that will yield home prices up to the $90,000 range. For some finding such properties would be like finding a “needle in a haystack” for the many, given the decline in home prices there is plenty of available stock.