Dive Brief:
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The prolonged period of historically low mortgage interest rates has not convinced homebuyers to invest in real estate, according to a study by the Federal Reserve Bank of St. Louis.
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Traditionally, low rates translated into more home buying, in part because downward pressure on interest rates helps keep home prices lower, according to the bank. Since the recession, however, the homeownership rate has continued to decline, despite low rates and mostly stable prices.
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In fact, the rate of homeownership has fallen from 69.1% to 64.4% since the third quarter of 2014.
Dive Insight:
It seems certain that the Fed will raise interest rates slightly at some point in 2015. Perhaps the reverse will hold true, and willing homebuyers will not shy away from purchasing property as the cost of a mortgage increases.