Housing mortgage rates fall below 4 percent

Good news for people who have the credit to buy a home. The interest rates on 30-year fixed mortgages fell below 4 percent for the first time this week.

LOS ANGELES, CA (Catholic Online) - Unfortunately this will not help those who are already underwater in their mortgage.

On Thursday, Freddie Mac, one of the major mortgage finance providers, controlled by the government, said that the national average rate for 30-year fixed mortgages had dropped to 3.94 percent.

This is the lowest those rates have been since records were kept beginning in 1949.

The US Federal Reserve slashed interest rates to near zero in December 2008 in an effort to reduce costs for mortgages and other loans. It has tried a variety of different measures to pull the economy out of recession. And while Wall Street says the recession is over, the recession appears to continue for Main Street and millions of people who are unemployed, and others who are upside down in their mortgages.

Many economists are skeptical that the Federal Reserve's continued efforts to reverse the recession will have any effect. They point out that the Federal Reserve has already used its most powerful weapon (interest rates).

On September 21, the Federal Reserve said it would change the composition of its bond portfolio in an effort to further reduce borrowing costs. Experts have said that this substantial measure would only have a modest effect on the economy.

Perhaps the primary problems facing the economy are high debt and unemployment. Tight lending restrictions are preventing even those with low debt and jobs from obtaining credit. And lowering interest rates yet further does very little to inspire banks. Presently, banks are cherry picking their customers. And while this is a sound financial strategy, and probably the only responsible strategy, it means that the process of financing large purchases such as automobiles and homes will remain difficult for many Americans for some time to come.

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